Dissecting Delhi’s EV Policy

With the new Electric Vehicle Policy 2020, Delhi CM Kejriwal aims to ‘transform the national capital to the EV capital of India’, and believes Delhi will be leading the EV discussions in the next 5 years instead of China.

We break down the Policy, and verify if his aims are true using simple Math.

Image Source: Publicis Sapient

Goals of the EV Policy

1. Register 500,000 EVs in the next 5 years
2. By 2024, EVs to comprise 25% of all new vehicle registrations
3. 200 new EV stations in the next 12 months
4. All Delhi govt vehicles to be EVs in the next 12 months
5. Last-mile 2 wheelers: 50% by March 2023, 100% by March 2025

Present Situation

1. 83k registered EVs out of which 75.5k are e-rikshaws
2. 900 private electric cars
3. 3700 e-two wheelers
4. Less than 25 authorised stations

Incentives for Consumers

1. Rs. 1.5 lakhs for cars
2. Rs. 30000 for 2 wheelers
3. Purchase incentives 5000/kWh of battery capacity, which translates to almost double the incentive provided currently by the DPCC
4. Interest subvention of 5% (12% to 7%- lowest in India for EVs)
5. No road tax or registration fees

Missing: Incentives for Manufacturers

Simply put, EVs are expensive because it is expensive to manufacture batteries.

In 2019, every Chinese vehicle manufacturer and importer was required to make or import at least 10% electric vehicles.

The Chinese government provides subsidies to manufacturers of electric vehicles. These subsidies have, however, been steadily reduced in recent years, almost cut to half.

The EV policy of Delhi does not provide any incentives to manufacturers as of now, apart from the wider policy launched by Niti Aayog.

The main question: are these goals feasible?

Even if we assume 100% conversion of all specified goals, will Delhi become comparable to China?

To make a comparison between the EV capacity of Delhi and China, we had to pick a metric standardised to the number of vehicles in the areas.

We also wanted to pick a metric from the supply side, since we believe that to be the bottleneck for now.

So, we picked Number of charging stations per electric vehicle.

Currently, Delhi stands at 0.03% to China’s 15.19%.

The EV policy aims to set up 200 charging stations in the next 12 months.

Taking a not-so-modest annual growth rate for charging stations of 20% per year, our figure of Number of charging stations per electric vehicle increases to a feeble 0.25%.

To match China’s current figure of 15%, Delhi will have to adopt a growth rate of more than 300% per year.

(And this is not accounting for the fact that the number of charging stations in China have been increasing at an average rate of more than 40% for the past 2 years, thus China’s metric is also likely to increase to more than 15%. On the other hand, the number of charging stations would stagnate after a point of time, while the number of EV vehicles continues to grow, thus 15% is taken as a viable figure.)

Find here our calculations: https://docs.google.com/spreadsheets/d/1ZoyEIZ9B1B8fnozIK4S7kA1McTnws2o9e5KtZLg7IuM/edit#gid=0