Why in news?
Government of India has planned to ban the sale of fossil fuel-driven 2&3 wheeler vehicles by 2025.
What is the Government’s plan?
- Government wants to halt production of internal combustion vehicle,
- Three-wheelers by 2023 and
- Two-wheelers with 150cc engines and below by 2025.
- NITI Aayog has given a two-week deadline to the industry to come up with a comprehensive plan for introducing electric vehicles (EVs) in the next 5 years.
What is NITI Aayog’s stance?
- Pollution - As per a report by Greenpeace and AirVisual, India has 22 of the most polluted cities in the world, with Gurugram being the most polluted.
- Two-thirds of the pollution load is due to internal combustion engine based two-wheelers running in major cities.
- This will be reduced with the transition.
- Dependence – India is hugely dependent on oil imports.
- The NITI Aayog estimates savings of Rs 1.2 trillion if the transition takes place.
How did the automobile industry react?
- Industry leaders have questioned the urgency.
- They also have pointed out the increase in the cost of vehicles due to the price of batteries which constitute 40% of the total cost.
- In addition, considerable planning and execution are required to simultaneously develop a complete ecosystem around EVs.
- They insist such a short-notice switch is impossible and it would destroy an industry that’s a key global exporter.
- Additionally, the industry is already facing difficulties in coping with the transformation to meet the BS-VI regulations.
- In the unorganised sector, the vast pool of mechanics would also suddenly find their services aren’t greatly needed.
- Only EV manufacturers are enthusiastic about the proposals.
What should be done?
- While a move to EVs is inevitable, the industry should be given a reasonable time.
- With the country facing mounting unemployment, managing the transition fallout will be all-important.
- Chinese example - China took the EV route as early as in the 1990s by classifying electric two-wheelers that move at 20 km/hour as bicycles.
- Beijing made them attractive by doing away with registration.
- They are allowed to be ridden in bicycle lanes.
- Soon, it restricted the ownership of gasoline-powered two-wheelers in some cities.
- It has been giving tax benefits and other subsidies to carmakers for almost a decade.
- To spruce up their supply chain, Chinese companies have been aggressively buying lithium mines, the critical component for making batteries.
Source: Business Line
