Dominance of e-3-wheelers

Context: India’s EV ambition rides on three wheels

Background

• India’s push for electric vehicles (EVs) was renewed when phase-II of the Faster Adoption and Manufacturing of (Hybrid and) Electric (FAME) Vehicles scheme in India, with an outlay of ₹10,000 crore, was approved in 2019.
• India was doubling down on its EV ambitions, focusing on cultivating demand for EVs at home while also developing its own indigenous EV manufacturing industry which could cater to this demand.

FAME II

• Aims to boost electric mobility and increase the number of electric vehicles in commercial fleets
• Initially envisioned for three years, FAME-II got a two-year extension in June 2021 owing to a number of factors including the pandemic.
• It aims to support 10 lakh e-two-wheelers, 5 lakh e-three-wheelers, 55,000 e-four-wheeler passenger cars and 7,000 e-buses.
• As a part of FAME-II, the government has made a push for indigenous manufacturing of EVs
• While e-two-wheelers and e-four-wheelers receive significant coverage, a three-wheeled underdog has been quietly dominating the Indian EV space.

The dominance of e-3-wheelers

• Three-wheeler EVs like e-autos and e-rickshaws account for close to 65% of all EVs registered in India while two-wheeler EVs come at a second with over 30% of registrations and passenger four-wheeler EVs at a meagre 2.5%
• Under the targets for FAME-II, e-three-wheelers have crossed over 4 lakh vehicles of the 5-lakh target since 2019.
• At the current rate, e-three-wheelers are expected to breach the 5-lakh target by 2023

Factors responsible for success of e-3-wheelers

• The EV registrations data show that Assam, Bihar, Delhi, Uttar Pradesh and West Bengal account for close to 80% of all e-three-wheeler registrations
• Of these five States, Assam, Delhi, U.P., and West Bengal have formalised EV policies
• Indigenously designed and produced, e-three-wheelers like e-rickshaws have become a common sight in these States
• These vehicles are produced by local workshops and small enterprises and have come to dominate the e-three-wheeler market
• With financial assistance from FAME-II, local manufacturers have built a truly Indian EV with its unique design catering to Indian commuter needs.
• Legacy automakers have been struggling to compete with these local producers.
• The focus of the EV policies of these five States is on accelerating adoption of EVs among consumers and promoting local manufacturing.
• The success India has experienced in the e-three-wheeler space has come from developing both the demand and supply sides. Subsidies, tax exemptions, and interest-free loans have successfully rallied demand for these vehicles.
• These vehicles are easy to maintain, and have relatively low operating costs, making them immensely popular among operators

E-2-wheelers and e-4-wheelers

• This success in the e-three-wheeler space has been difficult to replicate in the e-two-wheeler and e-four-wheeler space, which have problems both on the demand and supply side
• Both the types are associated with personal use, consumers are justifiably apprehensive in adopting such vehicles given the host of issues which come with it.
• The recent incidents of fires in e-scooters have added to the apprehension.
• Reliable manufacturers with proven track records in the two-wheeler and four-wheeler EV space in India are hard to come by – this adds to the supply side crunch and there are very few affordable offerings for the consumer.

Issues to be addressed

• The current policies focuses on accelerating adoption of EVs among consumers, have spurred an e-three-wheeler dominance
• The major aspect that is missing the attention of policy makers is adequate passenger safety
• Local manufacturing enterprises often lack the necessary resources or the motivation to invest in design developments focusing on safety.
• Lack of proper oversight from regulatory bodies over these manufacturers adds to the woes.
• The current State-level policies have led to an increasingly fragmented manufacturing industry with non-uniform standards – This fragmentation has led to legacy automakers struggling to compete with the large number of manufacturers in every State

Way Forward

• Future EV policies must incorporate appropriate design and passenger safety standards
• EV policies must address the issues faced by legacy automakers and ensure they are not demotivated from competing in the e-three-wheeler space. Their resources are necessary for designing and manufacturing more advanced and safer e-three-wheelers

Future EV policies must therefore take into account the existing and emerging stakeholders on the demand and supply sides for effective implementation. With the prevailing trajectory of EVs, India must take lessons from its e-three-wheeler success story to sustain its EV ambitions.

Previous Year Questions (PYQs)

Q.1) What is the aim of the programme ‘Unnat Bharat Abhiyan’? (2017)

1. Achieving 100% literacy by promoting collaboration between voluntary organizations and government’s education system and local communities.
2. Connecting institutions of higher education with local communities to address development challenges through appropriate technologies.
3. Strengthening India’s scientific research institutions in order to make India a scientific and technological power.
4. Developing human capital by allocating special funds for health care and education of rural and urban poor, and organizing skill development programmes and vocational training for them.

Source: The Hindu