By Aditi Shah
NAGPUR, India (Reuters)

Indian ride-hailing firm Ola‘s pilot project to test a fleet of electric vehicles in the western city of Nagpur was expected to herald a coming revolution in the Indian autos industry. So far, though, it has only exposed fractures in Prime Minister Narendra Modi‘s ambitions to make all new vehicles electric by 2030

With an initial investment of about $8 million, Softbank-backed Ola launched the project last year at an event that had all the trappings of a state function, including a big gathering and flagging off by Transport Minister Nitin Gadkari.

But nine months later, the program has hit a snag: Ola drivers, unhappy with long wait times at charging stations and high operating expenses, want to return their cars and switch to fuel-guzzling variants.

Out of 20 Ola electric car drivers interviewed by Reuters in Nagpur, more than a dozen said they have either returned their electric taxis and switched to diesel, or are planning to do so.

 

Mahindra showcases ATOM at the India Auto Show in Greater Noida
Mahindra showcases its new electric vehicle, ATOM, at the India Auto Show in Greater Noida, India February 7, 2018. Picture taken February 7, 2018. REUTERS/Saumya Khandelwal

 

Ola had said it would make 50 charging points available across four locations in Nagpur – a city of about 2.5 million people – for its fleet of 200 electric vehicles, but on a visit to the city in late January, Reuters found only about a dozen charging points. Ola has since added 10 additional charging points but is still short of its target.

Ola did not respond to requests for comment for this article.

 

Getting infrastructure built in the world’s biggest democracy where a not-in-my-backyard culture proliferates is a barrier for a lot of businesses in India

And it is proving to be the same for charging stations – Ola was forced to close one in Nagpur last year after protests by residents angered by traffic jams caused by drivers. It took more than five months to get government clearances to begin operating another station.

The hurdles faced by Ola in setting up sufficient charging stations for a fleet of expensive electric cars with a limited driving range expose the challenges the Indian government and automakers will face if they are to get anywhere near realizing the 2030 vision.

 

REPEATEDLY WARNED

Global auto makers have repeatedly warned that India is not ready for electrification, saying the government must first lay down a clear, long-term policy, provide incentives to encourage manufacturing of electric vehicles to bring down their cost and create the charging infrastructure.

 

Mahindra showcases its electric two-seater vehicle UDO at the India Auto Show 2018 in Greater Noida
Mahindra showcases its electric two-seater vehicle UDO at the India Auto Show 2018 in Greater Noida, India February 7, 2018. Picture taken February 7, 2018. REUTERS/Saumya Khandelwal

 

Gadkari added to uncertainty when he said last month that the government will no longer draft a separate electric vehicle policy. He did not comment on the 2030 vision.

The Ola project has not turned out to be economically viable for either the company or its drivers, said one industry source familiar with Ola’s strategy.

“The project’s not flying as of now and the economics is not working out,” the source said.

Electric car sales in India, one of the world’s fastest-growing auto markets, made up less than 0.1 percent of annual sales of more than 3 million passenger cars. The lack of demand is mainly because they are expensive – due to high battery costs – and as their range is limited and there isn’t a charging infrastructure.

 

 

By comparison, in China in 2017, electric vehicles made up about 2 percent of annual passenger car sales of 24.7 million.

The Indian government had been determined to promote electric vehicle use, starting with public transport and taxis, to combat rising pollution and reduce the nation’s dependence on imported oil.

India’s 2030 ambition was part of a broader move by countries like China and the United Kingdom, which have set similar goals. This has spurred billions of dollars in investments by carmakers like Volkswagen and Ford Motor even as many in the industry say they are unsure who will buy the massive numbers of electric vehicles governments want them to produce.

 

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