China-India exchange on electrical-vehicle technology could boost industry and sustainability

Rapid economic growth can harm a country’s ecosystems and environment, even though that growth ultimately depends on those resources. Sustainable practices therefore need to be mainstreamed across the board in developing countries as much as in developed ones.

India and China share several local conditions and societal challenges. In May, the Friedrich-Ebert-Stiftung in India organized a dialogue on energy transition emphasizing the need for the two countries to exchange insights on their responses to climate change and other environmental risks in the context of their respective socio-economic transformations.

Following this India-China Energy Dialogue, we met with Aditya Ramji, economist with Indian car manufacturer Mahindra and Mahindra Ltd, to discuss ecosystem sustainability, how recent technological developments can help protect it, and the role of international dialogue in this endeavour.

Some emerging countries are seeing a growing backlash against the environmental cost of rapid economic growth. Can international collaboration in Asia help?

Aditya Ramji: There is significant advantage in regional collaboration, as some of the challenges and solutions are common to countries in the region. There are already several regional platforms, however, these are currently focused on trade.

More collaboration among member countries towards accessing low carbon technology, joint research and development (R&D), and access to affordable finance for climate action, could usefully be mainstreamed into the discussions. Lastly, bilateral engagements between neighbouring countries could provide key learnings. For example, Indian and Chinese industry could collaborate on manufacturing, battery technology and other aspects of the value chain around electric vehicles (EVs). Furthermore, there could be a greater exchange of lessons learned between the sub-national governments of the two countries around policies to promote e-mobility, following the example of the Maharashtra-Guangdong Partnership on Sustainability.

Sustainability touches several aspects of the economy. What are the game-changers that could contribute to the sustainability of India’s economic development?

AR: The precise definition of sustainability has evolved, but it remains based on finding the balance between the three principal pillars of economic growth, equity, and environment. If we use the UN Sustainable Development Goals as a framework, five of those could be game changers, if integrated into the core of India's growth story. They are: No Poverty (Goal 1), Affordable and Clean Energy (Goal 7), Industry, Innovation and Infrastructure (Goal 9), Climate Action (Goal 13), and Partnerships for the Goals (Goal 17). Given the multidimensional nature of poverty, a development paradigm that cuts across these areas is best able to tap the potential for economic development.

In a growing economy such as India’s, industry and Infrastructure play a key role. This requires a focus on innovation and climate action, which move practices towards resource efficiency, and sustainable consumption and production principles. Last but not the least, the country’s energy transition is essential not only to build a low carbon energy system, but also to ensure ongoing economic and energy security. Collaboration with other countries on all these areas will be key for India.

Access to transport infrastructure and services is crucial to the socio-economic development in rural areas. Can electric mobility play a significant role in bringing about this transformation?

AR: Access to mobility is a key aspect and probably the next wave after access to energy in India. In a rapidly urbanizing economy shifting away from dependence on agriculture, the demand for transport infrastructure and services in both, rural and urban areas, is growing.

The government’s Rural Roads Scheme connected more than 34,000 habitations between 2016–2019 and constructed almost 600,000 kilometres of rural roads. With better roads, and growing economic activity, there has been a significant growth in the number of three wheelers serving connectivity in and around the rural towns and villages, as well as a growth in car and two-wheeler ownership.

"Ensuring access to mobility services for all is crucial. It is not just about moving to cars with lower emissions, but also about better transport planning." - Aditya Ramji

With the average rural individual travelling 8–10 km a day, electric three wheelers can be a viable intervention in such areas, ensuring livelihoods for many and an on-demand mobility solution for others rather than relying on erratic public transport. Another opportunity is for electric two wheelers, including e-cycles, which can cater to different affordability levels. In small towns, connectivity between them and with the surrounding rural areas is key, where the commercial viability of electric vans can also be considered. With more than 600 million people living in rural areas, and about 9 million people annually migrating inter-state (Economic Survey 2017), strengthening the rural transport ecosystem is critical to ensure that people find meaningful employment and carry out trade and other economic activities in a more seamless manner, contributing to overall growth.

India desperately needs cleaner air, especially in urban areas. Electric mobility has been framed by the government as potentially reducing both air pollution and the massive bills for imported fossil fuels. What is your take on the transformation electric vehicles will bring about and how disruptive it will be? What are the impediments?

AR: Ensuring access to mobility services for all is crucial. It is not just about moving to cars with lower emissions, but also about better transport planning. Emissions intensity in the transport sector can also be reduced with better road infrastructure, a change in habitation patterns where people live closer to their work places, creation of jobs in tier-2 and tier-3 cities, amongst many other initiatives. Urban planning will play a key role in defining mobility demand and patterns.

For an effective transition to electric mobility, India needs to create an enabling regulatory system at the sub-national level, i.e., city and state level. This system will address issues ranging from vehicle registration to permits, state fiscal incentives, electricity utilities and charging infrastructure, in order to provide the right signals to the private sector to invest in clean mobility. With the current upfront costs of EVs still high, a focus on electrifying public and commercial transport while moving to stricter emissions norms for internal combustion-engine vehicles would be the way forward. India is already moving on this via, for example, the implementation of policies such as FAME-II and BS-VI.

India could save an estimated 700 billion rupees (10 billion US dollars) on fuel imports in 2030, in a scenario where 100% passenger vehicles would be electric (Infraline, January 2019). The potential for electric mobility in India is significant with growing mobility demand, innovation in business models and falling technology costs. India is expected to see 60 million passenger-vehicle sales  by 2025, almost double of what it is today. Even if India saw 1-2% of this transition to EVs, it would amount to around a million EVs.

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