India’s push on Electric Cars and Electric Car Insights from USA

According to Mint, India may spend Rs.1,400 crore over the next two years on incentives and subsidies for makers and buyers of electric vehicles as part of an effort to have at least six million electric vehicles on the country’s roads by 2020.

The scheme is also expected to improve India’s standing in global climate change discussions. In addition, the scheme can help reduce the country’s carbon dioxide emissions by up to 1.5%. In the next two years, the government hopes the policy will facilitate sales of at least 800,000 electric vehicles, led by the sale of two- and three-wheelers.

Besides, the government will also create a fund of at least Rs.600 crore from the auto cess that it gets for every vehicle sold in the country.

While India waits for this push, I managed to touch base with a friend [currently using an electric car] based in California, USA to learn what kind of incentives he enjoys from the government to use an electric car.

Mr.Amit Ailiani stays at Fremont, CA and travels to Suunyvale CA everyday [5 days a week] for work.
His earlier car was Volkswagen Rabbit (Golf). Volkswagen Rabbit (Golf) gave 22 miles per gallon and on average in US gas costs 3 dollars per gallon. Amit’s commute is 22 miles one way and hence cost per day is approximately 6 US dollars.

He has recently bought an electric car, Nissan Leaf – Base S Model. According to him, the car is just for the commute and near by shopping. It can easily fit 4 people and is absolutely noise free.
The car does not need any high maintenance like regular oil change. It just required brake change and tire rotation.

One interesting point was that he leased Nissan Leaf instead of buying it. The rationale behind this was that like computers, the electric car industry will see technology get oudated fast with more powerful cars coming in the next couple of years.
There are several programs for e.g. you can lease a car based on number of miles that you will drive per year. The options are 12,000 or 15, 000 miles per year. Depending on your commute distance you can opt for miles per year.
The total cost per month for leasing electrical vehicle is in the range 180 to 220 USD. This has been very attractive for several families where you can lease a new vehicle in an affordable price range. For most families in US 300 USD is the average cost of gas/petrol per month. So cutting down on gas is equivalent to lease price for Nissan Leaf

The down payment for the car was 2500 USD which was given back by US government; as a part of the incentive program to encourage use of electric cards. So after rebate the down payment was ZERO. There are extra costs if you have in built GPS and musics systems.

The driving range for Nissan leaf is 90 miles and so it will fit ones needs if your work commute back and forth is within 90 miles.

There are additional incentives by US government such as
1. Free installation of the charger at home
2. Discounted rates for electricity
3. One also gets a special sticker for the car which authorizes you to drive in carppool lane. The carpool lane in US is designated for commuters where they share ride (atleast two in one car) and during peak hours can drive in left most lane (fastest lane).

Nissan Leaf

On Car Charging, Amit said that charging stations are coming up everywhere like gas stations. He has charging station at home and at work. “At work you have to share it with co-workers so it can be challenge to charge your car every day. If you come early you can get in line”.
It takes 4 hours on 220 Volts to completely charge the vehicle. So it is basically a commuter car where you charge it overnight and is ready to use in the morning.

Due to limitation on driving range sometimes Amit has to stick to his planned route.

On the Cost Front: It usually takes 3.5 dollars to charge Nissan leaf. So if one compares this with gas cost you can get 90 miles in 3.5 dollars; whereas his old car would have given him the same number of miles in approx. 12 dollars.


Learning for India:

While we can have countless debates on the incentives that the government can provide to encourage use of electric cars in India, our experience from wind and solar teaches us that the aim should be to make the industry self-sustainable asap.

Some of the points that India can possibly look at initially to encourage electric cars:

1. Lower Registration Costs for electric car

2. No Toll Charges [across India] for electric cars

3. Yearly Income Tax Rebate for Electric Car Buyers

4. Project Tax Rebates for Developers building electric charging stations in Malls, Commercial Complexes, and Residential Buildings

But more importantly if the industry has to become self sustaining then the required infrastructure needs to be built. One of the most important of these being electric charge stations and for that we need continuous 24*7 power supply.

This entry was posted in Finance and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

One Response to India’s push on Electric Cars and Electric Car Insights from USA

  1. Oyeta936 says:

    India and Indian mindset is yet to be geared for rental or “lease”. We always think of buying. Be it a house or car. Moreover, due to lack of transparent deals and at times unscrupulous attitude, there are not many who would risk in India to lease out Cars etc. Even decent fully furnished homes for this very reason is hard to come by.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s