Electrification of auto-rickshaws is critical for reducing air pollution and providing clean mobility solutions in Indian cities. According to a 2018 study by TERI, an average conventional LPG auto emits approximately 5 kg of Particulate Matter-10 (PM10) in a year and about 3.72 tonnes of carbon dioxide in a year. On the other hand, electric auto-rickshaws provide zero tailpipe emission, no-noise solution, and lower operating costs, while meeting the mobility needs of people.
The Government of India has been responsive in recognizing the need for transitioning to electric mobility and has developed policies and schemes to direct the growth in this direction, both at the national and state level. Despite various subsidies and incentives, there are certain regulatory challenges in the adoption of electric three-wheelers which require policy support. The regulatory challenges and their possible policy solutions are summarised below:
- High upfront cost continues to be an issue hindering immediate demand creation in the electric three-wheelers segment in India. Mainstream financiers like banks and non-banking finance companies (NBFCs) do not easily provide financing to electric auto-rickshaw drivers as they are unable to meet lending requirements like self-funding for a minimum of 30 percent of the initial cost of auto rickshaws, and collateral of about 1.5 times the amount financed.
- There is a lack of clarity about the permit system. The regulatory provisions under the state EV policies state a fee waiver on the permit system for e-autos and have also provided an open permits system for e-autos, but the autos drivers are not aware about the permit requirements.
- Capacity building is required by the city authorities for updating the Charging infrastructure implementation regulations within the city.
- Limited safety checks requirements for electric autos. The market currently has a huge amount of variants of e-rickshaw which do not adhere to ARAI safety certifications.
- Limited scrapping solutions: Scrapping is done exclusively at the city scrapping unit referred by the RTO. The procedure for the same is very cumbersome and is present in limited cities. In most of the cities, there are no formal scrapping centres for auto-rickshaws, only informal markets. Since the auto-rickshaws are not getting out of the system, regional transport offices are unable to bring in the e-autos into the system.
The RTO’s can adopted suggested amendments in the permit system:
- As per the age of ICE-powered auto-rickshaws, permit renewal can be restricted (at least in highly polluted cities)
- For the initial one year, open permit system for e-autos can be practised
- The e-autos should have no or reduced permit fees
- The permit renewal period for e-autos can be increased in comparison to ICE auto-rickshaws
- Scrapping procedures should be laid out by the RTO’s to push the transition.
- A flexible carriage system for e-autos can be adopted
- There has to be proper safety checks before the approval of the vehicle as this may lead to accidents.
- As the banks are reluctant to give loans to the electric three wheelers segment viable business models in collaboration with the financiers will encourage adoption of e-autos.
- Electric autos can have home-based charging infrastructure, but mapping of the dedicated public charging infrastructure needs to be developed by the city authorities.
Thus, to sum up the regulatory constraints related to the permit system, scrapping, safety and charging infrastructure can be amended thereby providing regulatory solutions which will enable fast transition of the electric autos. These regulatory provisions can be an ease in the permit dispersal mechanism, laying down scraping procedures and encouraging partnerships for adoption of electric three wheelers.