India’s Mobility Leapfrog

Moving into the fast lane

While the U.S. withdrawal from the Paris Agreement may seem to have steered global climate action into the breakdown lane, India is signaling a switch to the fast lane that could define the transition to low-carbon mobility in emerging economies.

In March 2016, Minister Piyush Goyal set India’s sights on an ambitious target of 100 percent electric vehicles by 2030. Since then, the country has seen early signs of the rubber meeting the road in its public and private sectors. Ola, a domestic cab aggregator, is exploring opportunities to deploy electric cabs in major cities. India’s central government is eyeing an electric fleet. The Department of Heavy Industry recently revised its incentive scheme to more aggressively encourage adoption of electric vehicles. And several original equipment manufacturers (OEMs) are partnering on domestic manufacturing of lithium-ion batteries.

In May 2017, the National Institute for Transforming India (NITI Aayog), the Government of India’s premier think tank, and Rocky Mountain Institute released a report, India Leaps Ahead: Transformative Mobility Solutions for All, summarizing India’s opportunity to lead the world in advanced passenger transport while saving 876 million metric tons of oil equivalent, conservatively worth $330 billion, and 1 gigaton of carbon dioxide emissions, all by 2030. RMI’s ongoing work in India, in partnership with India’s government and private sector, draws on our U.S. work and aims to capture significant portions of these savings.

The report is an outcome of a February 2017 design workshop with 75 government officials, business leaders, and members of civil society that NITI Aayog and RMI cohosted in New Delhi. It outlines a vision for India’s mobility future, describes a set of 12 near-term solutions to jump-start the transition, and offers a change model to drive further progress.

A Vision for India’s Mobility Transformation

India is at a crossroads in its mobility development. Many Western countries, including the U.S., are grappling with the repercussions of transportation systems dominated by internal combustion engines and personal vehicle ownership—costly congestion, sprawling cities, unhealthy pollution.

Although India hasn’t yet merged onto that highway, it’s heading in that direction and picking up speed. Personal vehicle ownership grew by roughly 200 percent to nearly 160 million between 2002 and 2013. Every day, India registers more than 50,000 vehicles. Road accidents exceeded a half-million in 2015, resulting in more than 146,000 fatalities—that’s 400 deaths per day. Congestion is slowing average road speeds in cities to a creeping pace of 20 kilometers per hour or less. And public health issues are a growing concern in India, home to 10 of the world’s 20 most-polluted cities, including Delhi, where four of 10 children suffer from respiratory ailments.

India has an opportunity to leapfrog the traditional model of mobility and usher in a mobility system that is shared, electric, and connected. A shared system centers on usership, not ownership, by putting more people in fewer vehicles, decreasing congestion while providing better service and greater access at lower cost. Such high-mileage vehicles enable economic electrification—due to the lower operating costs of electric vehicles—reducing tailpipe emissions and cutting emissions at the source through the integration of variable renewables. And these autos can integrate with other modes, including biking and public transit, through better physical and digital connectivity, especially through mobility-oriented development and interoperable transport data.

Together, these three features—shared, electric, and connected—could not only define India’s transition to a low-carbon mobility system, but also create a new mobility model for the world.

A Set of 12 Near-Term Solutions to Jumpstart the Transformation

Five government ministers echoed elements of the vision laid out in the report during the February 2017 workshop. Nitin Gadkari, minister of roads transport and highways, said, “[Mobility transformation] will be a game changer in every manner for our country.” Turning that vision into reality will require rapid testing and deployment of transformative solutions.

To jump-start India’s mobility transformation, RMI and NITI Aayog designed a two-day process to help the 75 workshop participants identify and develop a dozen near-term, actionable solutions related to six opportunity areas: mobility services, interoperable transport data, mobility-oriented development, vehicle-grid integration, product manufacturing, and electric vehicle deployment. Chapter 5 of the report provides detailed overviews, implementation plans, and case studies related to each solution.

Several solutions are already gaining traction in India. As government officials and OEMs debate the transition in India’s vehicle-technology mix, feebates—rebates for efficient new vehicles paid for by fees on inefficient ones—are emerging as an attractive policy mechanism because they are agnostic about efficient-vehicle technologies. Zero-emission vehicle credits, a market-based instrument behind California’s U.S.-leading electric-vehicle penetration, are also under consideration to provide OEMs with an additional financial incentive for electric-vehicle production.

Complementing these fiscal incentives with nonfiscal incentives, such as offering electric vehicles access to bus lanes, has proven an effective lever for stimulating adoption in European countries, like Norway. While dedicated lanes don’t frequently exist in India, a customized set of nonfiscal incentives that deliver preferred access based on India’s unique conditions could be another cost-effective pathway to electric-vehicle adoption in India. Beyond electrifying four-wheel autos, efforts are underway to electrify key intermediate vehicle segments—two-wheelers and three-wheelers (rickshaws)—using smart, swappable batteries and to integrate these modes through innovative data platforms.

The solutions in the report are not exhaustive. Rather, they intend to serve as a starting point for India’s mobility transformation. Deployment of these dozen solutions is possible by 2019, helping put India on track to achieve its ambitious goals.

A Change Model to Drive Further Progress

Finally, the report proposes a two-track change model designed to transform India’s mobility system through (1) national deployment of market-ready solutions, and (2) experimentation and aggregation of such solutions in “lighthouse” regions, both of which feed into a national learning platform—a collaborative forum for discussion and debate and a consolidated knowledge and resource bank.

• Market readiness: Harnessing market forces to move vehicle segments to scale as they become economic is key to India’s mobility transformation. Between 2017 and 2019, India should aim to capture opportunities that are already economic and capable of rapid scaling while continuing to cultivate actions that are nearly economic. An example of such a solution is electric two-wheelers, many of which already feature two- to three-year payback periods. India should seek to enhance and continue scaling actions introduced in this first phase while beginning to deploy solutions with increasingly favorable economics through 2023. By 2032, in line with government planning documents, all vehicle segments should be market-ready for electrification and national deployment should be underway.
• Lighthouse regions: Testing, validating, and assembling components of the new mobility system in several lighthouse regions can help India prepare for and achieve national deployment. The insights and strategies developed in these leading regions can inform national regulatory and policy processes as more segments in the national market become economic. Developing new solutions and creating a platform for collaboration and demonstration can ultimately prepare India for integrative solutions at a national scale.

Combining best practices and lessons learned from these two related approaches in a national learning platform can equip key decision makers from India’s public and private sectors with the resources and information they need to craft new policies and to launch and scale innovative mobility solutions.

Building on a History of Entrepreneurial Transformation

India has a successful track record with leapfrogs. In the early 1990s, less than 1 percent of Indians had phone access. Today, there are 1 billion mobile subscribers because the country chose to focus on mobile, not landline access, leapfrogging the traditional pathway. Similar transformations are underway in the electricity sector, where India is observing record-breaking utility-scale solar power-purchase-agreement prices, bypassing costlier conventional baseload power plants. While much work remains, given India’s dynamic public- and private-sector leadership, entrepreneurial culture, ability to build infrastructure right the first time, and unique confluence of IT and manufacturing skills, there’s no telling how fast India can move.

RMI has committed to ongoing efforts in India, partnering both with the government and private sector, designed to facilitate nonlinear scaling of low-carbon mobility solutions, including a mobility solutions accelerator program similar to RMI’s e^–Lab.