Latest news with #DelhiElectricVehiclesPolicy2.0
Mint
3 days ago
- Automotive
- Mint
Hybrids vs EVs: New advisory for Delhi fleet operators adds fresh fuel to fire
New Delhi/Mumbai: A fresh advisory by New Delhi's air quality monitoring body has reignited the debate over whether hybrid vehicles can be included in the category of 'clean vehicles'. The Commission for Air Quality Management in the National Capital Region and Adjoining Areas (CAQM) in a 3 June advisory directed commercial fleet operators to not induct conventional petrol or diesel vehicles and prefer 'clean' automobiles instead, much to the chagrin of the electric vehicle lobby for not clearly defining clean vehicles. 'No conventional ICE (internal combustion engine) vehicles running purely on diesel or petrol shall be further inducted in the existing fleet of 4-Wheeler LCVs (light commercial vehicles), 4-Wheeler LGVs (light goods vehicles; N1 category up to 3 5 Ton) and 2-Wheelers with effect from 01.01.2026," CAQM said in its advisory to vehicle aggregators, delivery service providers, and e-commerce entities. While it did not define 'clean vehicles' this time, CAQM in a 2 May advisory defined these as battery electric vehicles, hybrid vehicles, and those running on compressed natural gas (CNG). The ambiguity in the latest advisory has left the door open for the promotion of hybrid vehicles in the national capital, which struggles with among the highest pollution levels in the country. EV makers led by domestic car companies have been lobbying to not give hybrid vehicles—which use both a combustion engine and an electric motor for propulsion—a policy status on par with battery electric vehicles (BEVs). Doing so could risk their investments in developing electric cars, they said. A rival lobby has been promoting the adoption of hybrid cars as these provide a more practical alternative to conventional combustion engine vehicles. The two lobby groups are now reading between the lines of policy documents. The purity debate Following CAQM's 2 May advisory, Tata Motors Ltd, Hyundai Motor India, and Mahindra and Mahindra Ltd rushed to the Ministry of Heavy Industries and Niti Aayog against the mention of hybrid vehicles as a clean technology along with EVs. The air quality monitoring body believes hybrid vehicles can help in urgently addressing the pollution crisis in Delhi. 'Strong Hybrid Electric Vehicles (SHEV) offer substantial improvements in fuel efficiency and emission reduction as compared to conventional diesel/petrol vehicles," CAQM said in its 2 May advisory urging state and central government departments in the Delhi-National Capital Region to procure only clean vehicles. The national capital region became a point of contention in the pure electric vehicle versus hybrid vehicle debate when the Delhi government on 22 April issued a draft policy proposing to grant hybrid cars the same benefits as fully electric cars. The Delhi Electric Vehicles Policy 2.0 proposed waiving road tax and registration fees on battery electric cars (BEVs), strong hybrid EVs (SHEVs), and plug-in hybrid EVs (PHEVs) priced up to ₹20 lakh ex-showroom. This would translate to savings of about ₹2 lakh on a car with an ex-factory price of ₹20 lakh. CAQM released its draft guidelines 10 days later. 'Inclusion of hybrid vehicles in incentives and putting it on the same pedestal as electric vehicles will discourage investments into EVs," an executive at one of the top domestic automakers said, declining to be identified. A move to hybrids Currently, only Maruti Suzuki India Ltd, the country's largest carmaker, has a portfolio comprising ICE, hybrid, and pure electric vehicles. Last month, Hyundai Motor India Ltd, the country's second-largest carmaker, said it planned to introduce hybrid electric vehicles in the country, without specifying a timeline. Honda Motor Co. Ltd said last month that it will focus on hybrid cars and slashed its EV target citing a slowdown in the adoption of electric cars. Analysts at HSBC Global Research, however, said hybrid vehicles and electric vehicles complement each other, and would ultimately help in the growth of the EV sector. 'The perception that promoting SHEVs will hinder EV adoption is misplaced, in our view. This is not a zero-sum game, but rather an incremental opportunity where incentivizing SHEVs contributes to the broader development of the clean mobility ecosystem, benefiting BEVs and advancing overall market growth," HSBC Global Research analysts Yogesh Aggarwal,Vipul Agrawal, and Vishal Goel wrote in a note dated 20 May. But other experts argue that only pure electric vehicles should be incentivized if the government wants to promote zero-emission vehicles. 'The objective of the EV policy is to cut down emissions of vehicles and also contribute to improving the air quality," said Sharif Qamar, associate director of transport and urban governance at The Energy and Resources Institute (Teri), a non-profit think tank. 'When it comes to the emission reduction objective, currently, only zero-tailpipe emission vehicles need to be prioritised. Incentives should be crafted to encourage players to move towards zero emission vehicles."
Mint
08-05-2025
- Automotive
- Mint
Complexities cloud Delhi's plan to give carbon credits to EV buyers
New Delhi/Mumbai: In a move that has sparked scepticism from industry experts because of complexities involved, the Delhi government is considering awarding carbon credits to buyers of electric vehicles (EV) in the national capital. The proposal, designed to promote the adoption of tail-pipe emission free vehicles, is part of the upcoming Delhi Electric Vehicles Policy 2.0. 'Collaboration shall be explored with development banks, carbon asset management enterprises to identify and evaluate various emission offset mechanisms and facilitate trading of carbon credits for the EV owners in Delhi," read the draft of the upcoming policy, which was shared with automakers for comment last month. Mint has seen a copy of the draft. The thinking is that by avoiding the carbon emissions of traditional vehicles, EVs could accrue credits over their lifespan. These carbon credits could then be sold by EV owners in a secondary market, offering them a potential revenue source that would lower their total cost of ownership for the vehicles. Emailed queries to Delhi's transport department, which is responsible for the EV policy, remained unanswered till press time. Experts, however, warn of several uncertainties involved, including the methodology to be adopted, pricing of the credits, and the availability, or lack, of potential buyers. The price of these credits is also expected to be minuscule compared to the cost of running them, one expert said. Vaibhav Chaturvedi, senior fellow at think-tank Council on Energy, Environment and Water (CEEW), said the move was a smart one by the Delhi government, but questioned how lucrative the incentive would really be. 'Unless there is some certainty or minimum price assurance in this regard, a prospective EV buyer might be left wondering about the cost saving due to carbon credits," he said. Also read | Foreign car firms eye trade deals for EV tariff reduction Estimates from Nikhil Dhaka, policy lead at consultancy Primus Partners, point to as little as ₹ 200-1,600 annual revenue from carbon credits for an electric car. Credit prices in the Indian market currently range from ₹ 100 to ₹ 800 per ton of CO₂, he said, adding that a typical EV offsets about 0.5–2 tons of CO₂ a year. Accurately estimating CO₂ savings per vehicle would also be a challenge, Dhaka said, as it would involve tracking usage patterns, grid emission factors, and vehicle specifications. Implementing such a system would require robust tracking of vehicle usage, clear carbon attribution, and a user-friendly mechanism for consumers to claim, trade, or utilize their credits, he said. 'Without a well-established mechanism, carbon credits alone are unlikely to be a strong buyer incentive yet, but could gain value as India's carbon market matures," Dhaka said. Connecting EV owners to carbon markets is another challenge. According to Deepto Roy, partner at law firm Shardul Amarchand Mangaldas & Co., if credits are given directly to EV owners, it will be difficult for them to access the carbon credit markets, where trading usually happens at a larger scale. 'It would be easier to give the credits to manufacturers or if the government steps in and buys the credits at a floor price, aggregates them and then sells them in secondary markets," Roy said. Read this | Tata Motors considers new ICE models as EV adoption slows, competition intensifies There is no precedent globally for carbon credits being awarded to EV buyers, Primus Partners' Dhaka said. However, similar concepts do exist for other stakeholders in the EV value chain. For example, China's credit system gives automakers carbon credits for selling EVs. Companies must meet credit quotas or buy credits from others, pushing manufacturers to produce more EVs. Then, in California, electricity used for EV charging generates credits for charging companies. More than $2.8 billion flowed to EV charging suppliers in 2023, Dhaka said. 'This is analogous to paying EV drivers (or their utilities) for the carbon reduction from switching fuels. The lesson: well-designed credit programs can channel large funds to accelerate EV adoption, but they require tight regulation to prevent oversupply," he said. I.V. Rao, distinguished fellow of transport and urban governance at research institute Teri, said that the proposed carbon credits policy for EV buyers could act as a boost if seen together with other incentives in the scheme. 'However, for effective policy implementation, you would need guidelines on how the carbon credits trade will work," he said. 'Based on usage of a vehicle and its age, some carbon credit incentives can be thought of." And read | India's clean mobility drive hit as electric two-wheeler subsidies miss target in FY25
Mint
24-04-2025
- Automotive
- Mint
Delhi plans incentives for hybrid cars, drives domestic carmakers into panic
New Delhi/Mumbai: A draft policy from the Delhi government proposing to grant hybrid cars the same benefits as fully electric cars has generated waves of concern among homegrown carmakers. Most such automakers have committed billions to BEV (battery electric vehicles) technology, and their development roadmap does not include hybrids. A draft of the policy–Delhi Electric Vehicles Policy 2.0–shared with automakers for their comments on Tuesday mentions that the National Capital Territory of Delhi will waive the road tax and registration fees on electric cars priced up to ₹ 20 lakh ex-showroom. This waiver has also been extended to strong hybrid EVs (SHEVs) and plug-in hybrid EVs (PHEVs) with a similar price cap "acknowledging their contribution to reducing vehicular emissions and supporting cleaner mobility," the draft policy read. This would translate to savings of about ₹ 2 lakh on a car with an ex-factory price of ₹ 20 lakh. The waiver of these charges is expected to encourage adoption of hybrid cars among consumers, as per the policy draft, a copy of which Mint has seen. Uttar Pradesh was the first state to waive these charges for hybrid vehicles in July last year. The move was strongly opposed by several automakers. Domestic automakers fear that Delhi's decision could set a precedent for other state governments. 'The problem is, if Delhi equates hybrids with BEVs, it sends a symbolic message," said one executive who works at a domestic automaker, requesting anonymity. 'Once Delhi does it, everyone will do it. Then why would we invest in BEVs? It is sending shockwaves for the entire folks who are doing BEVs." Also read | Kia India doesn't expect hybrid incentives, bets on flexible strategy: CEO Gwanggu Lee To be sure, this is just a draft and the policy is yet to be notified. Alongside, the draft policy has mentioned that the incentives to hybrid vehicles will only be applicable once a competent authority within the Union government defines SHEV and PHEV. For context, an SHEV is typically a car in which an electric motor gives significant assistance to the combustion engine in moving the car forward. PHEVs, as the name suggest, come with a charging port for the battery that drives the motor. These vehicles typically can run exclusively on the electric motor without assistance from the combustion engine when required. Homegrown Indian automakers Tata Motors and Mahindra and Mahindra, along with Korea's Hyundai Motor, have been lobbying the Indian government to keep all incentives limited to EVs, a technology where they are heavily invested. While the domestic automakers do not have the know-how to make hybrid vehicles, Hyundai has hybrids in its global portfolio. On the other hand, Japanese carmakers Maruti Suzuki and Toyota Motor, who are way behind in the BEV race but have mastered hybrid technology, have been lobbying the Indian government for tax breaks on hybrid vehicles to boost their sales. They have pitched hybrid vehicles as an intermediate solution in the shift to electric mobility, as it causes lower emissions than conventional cars while also being more practical and viable than electric cars. The transport department of the government of NCT of Delhi did not comment till press time Wednesday. Queries sent to Mahindra, Hyundai, Maruti Suzuki and Toyota Kirloskar Motor did not elicit a response. Tata Motors declined to comment. Read this | Andhra Pradesh decides against incentives for hybrid vehicles in new EV policy 'This move is completely antithetical to Delhi EV Policy 1.0, where there was no mention of hybrids. In the second iteration, you should be more aggressive, but instead you are going one step back and bringing in hybrids," said the executive cited above. 'The addition of hybrids seems like an afterthought at the insistence of the hybrid lobby." Abhishek Saxena, a former public policy expert at government think-tank NITI Aayog, agreed that pure electric vehicles and hybrid electric vehicles should not be treated equally in terms of government incentives. 'This move can be a big policy signal of softening stance for hybrid electric vehicles," he said, adding that this softening could be a consideration to reduce GST for hybrids as well in the future. Hybrid cars combine the power of a traditional internal combustion engine with an electric motor, improving fuel efficiency while cutting down on emissions and fuel usage. However, they tend to be more expensive than standard combustion engine vehicles due to added components such as the electric motor, battery, and related electronics. In FY25, about 6,800 hybrid cars were sold in Delhi, amounting to more than 8% of the total 80,400 such vehicles sold in the country, as per vehicle registration data from government portal Vahan. In terms of EVs, Delhi's sales in FY25 of 6,092 units was 6% of the total sales of 100,667 units in India, data from Vahan showed. Also read | Honda Cars bets on hybrid, electric line-up to meet stricter CO2 emission norms Overall, with over 187,000 units, the national capital accounted for 4% of all cars registered in India during the year. However, experts on the other side of the debate feel that hybrid vehicles are a good option to whittle down vehicular emissions considering EV adoption will be much slower. 'If implemented, this will be a good move as it is reacting to the reality that the infrastructure to push pure EVs completely is not there," said Nikhil Dhaka, policy lead at Primus Partners. 'As a result of this move, if it goes ahead, we will definitely see preference for hybrid vehicles increase as compared to ICE equivalents. The stance of Delhi can also inspire other cities and states to consider granting waivers to hybrid vehicles." Deloitte's recently released '2025 Global Automotive Consumer Study' said that Indian consumers are strongly inclined towards hybrid electric vehicles compared to pure electric vehicles. As per the study, 33% of consumers wanted to buy hybrid cars as compared to just 8% preferring pure electric vehicles. Internally, domestic players are also concerned that any incentives given to hybrid vehicles will dent into the sale of their high-end diesel cars, which are their biggest margin centres. With the removal of road tax and registration fees on hybrid cars, they would be priced closer to large diesel cars, making these diesel vehicles uncompetitive in the market. And read | Uttar Pradesh govt to retain tax waiver for hybrids despite opposition from EV makers For instance, Maruti Suzuki Grand Vitara's hybrid variants, which have an on-road price of ₹ 21-23 lakh on-road in Delhi could cost ₹ 19.5-21 lakh with the waiver of road tax and registration fees. At this price, it undercuts all but the most affordable five trims of Tata Motors Harrier, which is a comparable car with a diesel engine. Similarly, it undercuts many diesel variants of Mahindra's XUV 700. Maruti Suzuki does not sell diesel cars.
