Q. Tell us about the work of Ola Mobility Institute, and your pioneering Ease of Moving Index?
A. Ola Mobility Institute (OMI) is a think tank set up to develop knowledge frameworks that will focus on the intersection of mobility and public good. The institute focuses on leveraging the “disruptive” potential of mobility as a growth and innovation engine for India’s economy. OMI keeps in mind the diverse expectations of Indians from mobility services and is making deep strides to evolve into a credible, global think-tank in mobility policy and a beacon of how businesses can create a social licence to operate.
“Ease of Moving Index (EoMI) 2018 was the 1st flagship publication of OMI launched by the Hon’ble Minister of Road Transport & Highways, Shri Nitin Gadkari”
EoMI is a framework created by OMI to help cities evaluate their mobility scenarios on about 50+ parameters. The Index aims to support policymakers, planners and practitioners, and businesses and citizens alike to identify mobility requirements of cities in India, challenges faced by the public, and aspirations of the citizens. The Index helps promote sustainable mobility through emerging technologies and business models, and enables cities to benchmark their performance with other comparable cities on various predetermined mobility parameters.
The Index provides for an overall score cum ranking of each city, and OMI aspires to release a biennial Ease of Moving Index rankings for cities to benchmark improvements achieved on each of the parameters and foster a competitive spirit amongst the cities to improve mobility holistically and in a sustainable fashion.
Q. Mobility as a Service is the emerging trend. From OMI’s perspective, how far are we from seeing MaaS become the new “business-as-usual” in urban mobility?
A. It is critical to recognize that the city has always been intricately intertwined with mobility. Mobility is a factor of growth and pride for many cities. In India, this is evidenced by the focus on metro rail development, from Bengaluru to Ahmedabad, and embodied by the value of Mumbai’s suburban rail or Delhi’s impressive transit network.
It is also critical to recognize the evolution of the city resident. A generation that carries mobile phones with data connectivity has a different reverence for time and changing expectations of the physical environment. The cost attached to the commute is not to the liking of the new-age city resident. Urban sprawl has long been associated with an aspiration for ‘the drive’. ‘The drive’, whether self-driven or chauffeured, is a function of person, driver and personal vehicle. Regardless of where you sit, personal vehicles require mental effort and physical space like parking spots for many underutilized hours a day.
This under-utilization of the personal vehicle brings a huge cost to both cities and citizens. The digitization of mobility has brought the concept of ‘a ride’, which can be understood as a function of a seat in a vehicle used by more than one person. In digital economy terms, we call this MaaS, Mobility as a Service. While traditional transit, including metros, buses and rickshaws are also mobility in the form of a service, they have not yet catered to the aspirations of the hyper-connected user. The key transformation is to make ‘a ride’ into a replacement for the aspiration of ‘a drive’, and integrate the traditional modes as a service to users.
“Still dominated by traditional shared mobility, India’s timing for growth makes it a promising candidate to leverage digitization to do urban mobility differently”
With vehicle ownership expected to rise exponentially there is an urgent need to expand digitization to seamlessly connect intermediate public transport (also known as para-transit) and public transport. The majority of mobility use cases can be served better by MaaS, or Mobility as a Service, than by ownership.
MaaS has significant potential in India. We need to make it possible to get from one place to another, regardless of the mode of transit, with an easy-to-use interface and seamless payment. With multimodal routing, booking, and billing, MaaS has potential to cater to the current market by creating a roaming ecosystem, wherein the perception of competition between public transport and para-transit is reduced. Various modes of transportation work together to form a single service. Involvement of a variety of transport leads to reduced over-reliance on one mode, while at the same time increases the attractiveness of public transport.
Q. With climate change set to impact countries like India, tell us about OMI’s work in trying to understand the impact of mobility innovations on our climate?
A. As India urbanises rapidly, it is imperative to create a path for sustainable, equitable, and inclusive growth. This pathway needs to address issues of vehicular congestion, air pollution, growing energy demand, increasing dependence on coal and imported fossil fuel, and the changing nature of work in the era of the fourth industrial revolution.
The shifting paradigms of mobility, namely, shared, connected, electric, and autonomous mobility will help India achieve a 5-trillion-dollar economy and form the basis of India’s climate action. India’s rickshaws, two-wheelers, taxi-cabs and auto-rickshaws, and buses – all take centre stage in the country’s efforts to decongest roads, decarbonise the transport sector, and increase the reliance on renewable energy.
“Ola Mobility Institute has a unique vantage point to study the impact of the shifting mobility paradigms on India”
Preliminary analysis reveals that India is well suited to ride the wave of shared mobility, (a) India has just 22 cars per 1000 population, and (b) a majority of Indians relying on public transit, intermediate public transport, and non-motorised transport such as walking and cycling, for their daily commuting needs. The digitalisation of shared mobility, as being witnessed in India and across the globe, through the emergence of on-demand mobility aggregators, is strengthening India’s reliance on shared mobility and public transit by bridging the gap of first- and last-mile connectivity and offering affordable mobility solutions for all.
Shared cabs, for their part, have a positive environmental and economic impact. Ola Share, as a rideshare category for instance, has kept 1.4 million cars off India’s roads in 2019. Since its inception in mid-2015 to early 2019, the category had saved over 37 million (3.7 crore) litres of import-dependent fossil fuel, and reduced CO2 emissions by over 63 million (6.3 crore) kgs.
Shared mobility is India’s primary weapon to fight decongestion while also laying the foundation for economic growth and prosperity. A forthcoming publication by Ola Mobility Institute looks at how Shared Bikes in the form of Bike-Taxis, Bike-Pool, Bike-Rentals are offering first and last-mile connectivity to public transit, improving the utilisation of idle vehicular assets and offering remunerative opportunities to owners of two-wheelers, creating and augmenting part-time and full-time livelihood opportunities in not just Tier 1 cities but also in India’s hinterlands, and strengthens road safety by enhancing the compliance of road users to traffic rules, among others.
OMI’s research also reveals that it is shared mobility that would be the early adopter of electric mobility in India. Corollarily, the success of e-mobility can be achieved by leveraging shared mobility. Unlike the developed markets which rely on cars for their daily mobility needs, India relies on small vehicles such as bicycles, two-wheelers and three-wheelers, and public transit in the form of buses. It is electrification of these modes that will help India reap the maximum benefits of electric mobility. OMI studied India’s first multimodal electric mobility project launched in Nagpur in the summer of 2017, and derived learnings relevant for the entire ecosystem.
“The findings of this study along with policy recommendations were published in our flagship report, Beyond Nagpur: The Promise of Electric Mobility“
The multi-modal fleet of electric cars and electric rickshaws in Nagpur – since inception in mid-2017 till early 2019 – a) Served over 3,50,000 customers, b) Clocked over 75 lakh clean km, c) Saved over 5.7 lakh litres of import-dependent fossil fuel, and d) Reduced CO2 emission by over 1,230 tons. This shows the promise and potential of electric mobility to help India become energy secure and become a global leader in the automobile and energy sectors.
Ola Mobility Institute also studied the role of the government in accelerating the adoption of electric mobility in India. Over the past few years, the national government has created momentum through several policies that encourage the adoption of electric mobility. The state governments too, for their part, are empowered to design options based on localized objectives, assets, and needs. This is evident in the varied approaches taken by the states. Ola Mobility Institute published EV Ready India: Part 1 – value chain analysis of state EV policies, prepared in collaboration with the World Economic Forum and launched at the India Economic Summit, 2019.
The study uses a Value Chain Framework to analyze the EV policies in 10 Indian States and UTs. It pays attention to the multisectoral and multistakeholder aspects of EV policies, analyses their overall sustainability from cradle to grave, and helps highlight the gaps in the value chain that need investment and further policy attention.
Q. To a great extent, app-based cab services like Ola, etc. have democratized our access to urban transport. Going forward, in which other segments of public transport does OMI feel huge impact can be created in terms of the net socio-economic benefits?
A. In both developed and emerging markets, mobility will be the primary driver of economic growth. Emergence of new technologies, cleaner fuels and automation is creating new markets that did not exist a few years ago. India in particular is seeing absorption of unskilled and semi-skilled labour migrating from rural to urban areas primarily in the real estate and transportation sector. Aggregator platforms have facilitated this change and opened a largely untapped mobility market to provide livelihood opportunities. It is a win-win situation for both the users and service provides/ drivers as multiple travel options with varying price options are available. New emerging segments such as bike-taxis and other micro-mobility solutions along with digital payments are poised to transform urban mobility further, improving access, affordability and predictability of travel.
Also, digitalization of mobility is critical for achieving financial inclusion for those engaged on mobility platforms. Their digitial footprint would enable banks and insurance companies to build financial products suited for their needs at a lower premium based on data.
Q. In your view, will the growth in the EV space taper or moderate out, since the definition now suggests EVs need to source their power from “clean” sources? How far are we from accomplishing this? How is the policy supporting this?
A. OMI estimates that India will soon become a global hotspot for electric mobility. The concerted efforts towards electrification will only be reinvigorated in the 2020s.
Electric mobility is sustainable and decarbonising in the sense that it is the demand for EVs that will also drive the demand for renewable energy. The attraction of EVs for fleet operators, i.e. operators of high utilisation vehicles such as public transit, shared mobility, logistics / goods delivery, employee transportation, etc., is the low operating expense of EVs. This can only be achieved if the delivered cost of electricity is as low as INR 4-5 per unit. The low cost of electricity can only be viably provided to energy operators (such as operators of charging stations and battery swapping stations) by distribution companies (discoms) by tapping into renewable sources. The chain of positive impact created by India’s reliance on EVs cannot be emphasised enough.
Fleet and energy operators, for their part, are installing solar rooftops to ensure that there is clean energy powering electric vehicles. Installation of solar rooftops provides the added financial benefit of lowering the electricity expense for the energy operator. For instance, solar rooftops helped lower the electricity expense of Ola Electric by 28% in Nagpur, thanks to solar net-metering which fed the power generated back to the grid.
State governments and discoms too are using the transition to e-mobility as an opportunity to increase their reliance on renewable energy. OMI’s value-chain analysis of state EV policies for instance reveals that nearly all states with a draft or notified EV policy have emphasised on the need to use renewable energy to power electric vehicles. India’s nationally-determined commitment to renewable energy production too is on track, wherein India will exceed its target and have 225 GW of renewable energy capacity by 2022.
In addition to driving the demand for renewable energy, EVs address a crucial challenge faced during renewable energy production – that of storage. Today, technological advancements have made it possible to consider EV batteries as energy storage units. In the Shared Resolution on Battery Swapping, OMI along with stakeholders across the EV ecosystem from EESL, BSES, Kinetic Green, Sun Mobility, Bounce, E-Bike-Go, Lithion, Vogo, Ola Electric, and more, identify Battery Swapping as a model to enable early scale in India’s EV ambitions, and outline benefits to India’s power sector and energy operators. Coupled with India’s plan to localise battery manufacturing by establishing gigafactories, particularly 6 gigawatt-scale plants for battery storage by 2025, and 12 by 2030, India’s going to witness increased focus and efforts towards electric mobility in this decade. Apart from EVs, such battery storages will cater to the consumer electronics industry and electricity grids, given the intermittent nature of electricity from clean energy sources.
Q. While supply-side factors will push the case for EVs, how can demand-side boost be given? How can the demand pull or buying behaviour be altered?
A. From a consumers’ standpoint, three concerns persist and are coming in the way of rapid adoption of electric vehicles: widespread availability of charging infrastructure, high upfront cost of procuring electric vehicles, and lack of consumer awareness. State-level EV policies offer the opportunity for all stakeholders to unite with renewed vigour and scale their attempts to achieve an e-mobility future.
A) Schemes for Augmenting Early Adoption of Electric Mobility
A.1) Incentives should be on usage rather than purchase of EVs
Indian cities have been experiencing rapid motorisation and the economic costs imposed on account of increased congestion as result of increased vehicle ownership are significant.
A study by Niti Aayog and Boston Consulting Groups estimates the economic loss because of congestion, for the top four metros cities (Delhi, Mumbai, Kolkata and Bengaluru) to be over USD 22 billion annually. Further asset utilisation today on private vehicles remains abysmally low. Niti Aayog estimates that shared vehicles could reduce annual mobility demand by nearly 1,800 billion vehicle km in 2035 by improving asset utilisation with high adoption of ride-sharing and public transit. With the objective to embrace shared mobility and discourage vehicle ownership, EV-specific financial incentives should be provided on usage and not the purchase of vehicles.
Since one of the primary goals for introducing EVs is to fight vehicular pollution and improve air quality, the focus should be on increasing usage of EVs. Reduced vehicular emissions due to the use of EVs would depend upon (i) the distance or journeys completed through EVs and (ii) source or fuel used for electricity generation. Any financial incentive should be designed to encourage usage of EVs rather than vehicle purchase.
A.2) Incentives should be targeted towards batteries and not just the vehicles
In case of battery swapping system, it is important to consider the vehicle and batteries separately. Since the batteries would be managed by the Battery Swapping Operators (BSO), the vehicle can be purchased without battery. Hence there would be scenarios where vehicles and batteries are owned by different entities. Moreover, vehicle manufacturing is already at scale and the vehicle without battery is in the same cost range as a vehicle today (i.e at the same range as an ICE counterpart). Therefore, an electric vehicle, sans the battery, does not require subsidy.
The challenge with batteries is that they are extremely expensive today and a scale effect is needed for them to become affordable. The subsidy on the battery provides the requisite push needed for crossing the chasm and reaching a tipping point where EVs achieve TCO parity with ICE counterparts. The subsidy should be per KwH along with some quality criteria, such as batteries which last a higher number of recharge cycles compared to others.
Further, batteries made in India can be given higher subsidies over batteries imported from outside. This would allow the entire ecosystem to embrace Make in India opportunity that was missed in the case of solar energy push in the country, an industry which continues to rely heavily on imports.
Battery swapping helps in mitigating long waiting time of drivers at charging stations, for commercial and private users alike. It further increases the running time of an electric vehicle, and improves the earnings of drivers. It is imperative that the government recognises the value of battery swapping especially in the shared mobility context of India, and designs ways of promoting the technology across the country.
A.3) Promote retrofitment across vehicular segments
Given the high upfront costs of EVs, the government should promote retrofitment for timely transition to e-mobility. Towards this, the central government has recently amended Central Motor Vehicle Rules for retrofitment of motor vehicles with Hybrid or Pure electric systems (MoRTH, 2019). Retrofitment is relatively simpler. For instance, an existing 3W post retrofitment is cheaper to run and maintain, but the high cost of conversion inhibits auto drivers in adopting these systems en-masse, although the investment could be recovered in a short span of time. The government should subsidise retrofitment with electric drive trains as part of state EV policy. This would yield benefits for the millions of drivers who rely on autos for their sustenance.
A.4) Incentives on scrappage of ICE fleet needs to be linked with EV adoption
For easier and timely transition to e-mobility, scrappage incentives should be offered on End-of-Life ICE vehicles (ELVs), with a condition that such an incentive is redeemable only at the purchase of EVs. Such an approach serves the dual purpose of managing the current fleet of ELVs besides accelerating EV penetration. It is estimated that as many as 21 million vehicles would reach end-of- life by 2025. Over 3.2 million tonnes of steel scrap, 0.3 million tonnes of aluminium scrap, 0.05 million tonnes of copper and 0.075 million tonnes each of plastic and rubber could be recovered from the current fleet of end-of-life vehicles.
A.5) Waiving off State GST on Electric Vehicles, Batteries, and Charging – Swapping Station Services
The current costs of electric vehicles is almost twice compared to their conventional ICE versions. Taxes and registration charges further elevate the on-road price of the vehicles by approximately 10-15%. Hence, state governments should waive off SGST for the initial period of three years for early and timely transition to e-mobility.
A.6) Exemption from Permits
Commercial EVs for city transportation should be exempted from all the necessary permits otherwise needed to run commercial vehicles, including taxis and auto-rickshaws in the country. This has proven to be a strong barrier to EV deployment. Permit-exemptions would therefore enable commercial vehicles to be incentivised to go electric. These are the very vehicles that have a tendency to run disproportionately more km than personal vehicles, all of which will now be clean in an e-mobility scenario.
B) Schemes to make E-Mobility Operations financially Viable and Sustainable
B.1) Delivered Cost of Electricity at INR 4 per unit, for a period aligned with the viability of business models
All states must endeavour to provide electricity at a delivered cost of INR 4 per kWh in the form of a special EV tariff. A lock-in period of 4-5 years for this special EV tariff, may further offer the necessary boost to make e-mobility projects financially viable in every state.
B.2) Allow the Aggregation of Open Access Electricity, and Access to Renewable Energy
The government should allow aggregation of open access electricity wherein buyers (such as app-based aggregators) should be able to pay for renewable energy they consume. The government could facilitate this by allowing access to private players to setup solar farms at subsidized cost.
Additionally, the government should offer exemption to maintain contracted demand. Today, there is a requisite to maintain a minimum threshold of 1 megawatt of power on standby to contract open access electricity. This requirement of a minimum threshold on contract demand especially for EV charging should be removed.
C) Schemes to setup and strengthen charging infrastructure
With land lease rentals forming a major portion of the opex of charging / swapping stations, it is recommended that viability gap support in the form of land at low rentals with a predetermined initial lock-in period be provided. As the market matures and stabilises, market rent could be levied. This viability support in the form of reduced lease rental may be provided for setting up charging and swapping stations at strategic locations in areas of high demand zones within cities. By minimising the dry run for drivers of EV fleets, this proposition would solve the dual problems of range anxiety and low utilisation of charging and swapping stations.
D) Schemes to Promote Manufacturing and Recycling of EVs
The government should incentivise setting up of recycling-businesses to focus on ‘urban mining’ of rare materials within the battery for feeding it back to the value chain. The policy should act as the driver for such robust reverse logistics network, crucial for e-mobility to be sustainable. This is important because, once the batteries reach 60-70% of their rated capacity and become unfit for automotive uses, the policy should incentivise its reuse as power banks for storing solar energy.
E) Promoting use of App based e-bikes/e-auto/e-rickshaw/e-cab
User incentive scheme: For all e-cab/e-auto/e-rickshaw/e-bikes rides taken through an app-based aggregator, the state should offer ‘cash back’ rebates for short first and last mile connectivity trips. The objective of such a rebate should be to make rides on electric vehicles at least 10-20% cheaper than an equivalent ride in an ICE vehicle. Similar approach has been proposed by the National Capital Territory of Delhi in its EV policy.
F) Non-fiscal incentives
To minimise the burden on the state exchequer, EV policy could offer a range of non-fiscal incentives that provide a boost to revenue streams thereby minimising the need for subsidising the cost of EVs.
F.1) Fast-track approval and Single window clearance:
States may setup a dedicated EV cell for effective day-to-day implementation of the State EV Policy. States may also consider the following recommendations for faster implementation of EV projects.
Fast Track Approval –
- Standard guidelines from Municipal departments, City Planning Offices and other Statutory bodies for the construction and operation of Charging Stations and Swapping Stations: This needs to be augmented with fast track approval for sanctioning of electricity load, design and building plan, fire and safety approval.
- From ARAI / ICAT for certification of electric vehicle
Single Window Clearance for Registration and Vehicle Transfer process / issuance of permits, and from Electricity Department
- There should be a defined checklist of documents to be uploaded online with self-declaration along with a timeline to execute the transfer and registration of cars, for issuance of permits and fitness certificate etc. While this would speeden the process of registering or transfer of vehicles, it would also curb any irregularities.
- Similarly, such a single window clearance system is required for approvals from the electricity department as well.
F.2) Dedicated zones: Zones should be defined which will exclusively allow only electric vehicles to operate. For instance, Airports / Tech Parks could be zones where price sensitivity is lower.
F.3) Preferential Parking and pick-up zones: Given that parking locations are now limiting, these should be redesigned to maximise EV access to charging. Moreover there should be free parking for EVs at all public and commercial spaces.
G) Schemes for Capacity Building and Re-skilling
A large number of new jobs would be created due to increasing EV adoption, with some jobs requiring re-skilling and some requiring newer skill sets. State governments may set up Centre of Excellence (CoE) to train EV mechanics and charging station staff, EV drivers, etc. These vocational courses could be developed in association with OEMs, Energy Operators and Battery Swapping Operators. Here the state EV policies should also focus on apprenticeship programmes in collaboration with actors across the value chain.
I) Awareness Generation
States should also consider celebrating EV-awareness days to promote behavioural change in favour of sustainability.
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