India’s EV transition cannot afford to ignore retrofitment, Pg9

Key Highlights:

• India faces significant energy dependency, importing over 85% of its crude oil, making it vulnerable to global energy shocks.
• Electric Vehicles (EVs) now constitute 8.5% of new vehicle sales in India for FY25-26, but over 30 crore existing Internal Combustion Engine (ICE) vehicles continue to rely on imported petroleum.
• Vehicle retrofitment, converting existing ICE vehicles to EVs, is proposed as a crucial strategy to accelerate India's EV transition.
• Retrofitment offers economic benefits by being cheaper than new vehicles and democratizes EV access, aligning with India's ethos of repair and reuse.
• A comprehensive national framework is needed to standardize policies, recognize retrofitted vehicles for financing, establish certification, rationalize GST, and integrate retrofitment into schemes like PM E-DRIVE.

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Detailed Insights:

• The conflict in West Asia highlights energy dependency as a structural vulnerability for emerging economies like India.
• The Indian government has emphasized transport-sector decarbonization through various schemes to support EVs.
• Retrofitment involves replacing an ICE vehicle's engine with an electric battery pack, motor, and control systems.
• This approach prevents premature retirement of functioning vehicles, addressing rising fuel costs and maintenance pressures for owners.
• Environmentally, retrofitment extends asset life, reduces waste, and supports a more circular mobility economy.
• A strong retrofit ecosystem can generate decentralized employment across technicians, service centers, and related supply chains.
• Globally, countries in Europe are exploring circular mobility models, and Nepal permits retrofit solutions.
• The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme initially included retrofitment support.
• Madhya Pradesh has taken steps to build a favorable ecosystem through subsidies and statewide agency registration.
• The market for retrofitment is maturing rapidly, with certified companies working with testing agencies, insurers, and financiers.
• Proposed policy changes include standardizing retrofit policies across states and formally recognizing retrofitted vehicles as financeable assets.
• Robust certification and safety standards are essential to prevent low-quality conversions and build consumer trust.
• Rationalizing Goods and Services Tax (GST) on retrofitment kits would ensure they are not at a disadvantage compared to new EVs.
• Making retrofitment data publicly available is crucial for informed policy-making and market development.

Key Concepts Involved:

• Internal Combustion Engine (ICE) vehicles: Traditional vehicles that generate power by burning fossil fuels like petrol or diesel.
• Electric Vehicles (EVs): Vehicles powered by electric motors, using energy stored in rechargeable battery packs.
• Vehicle Retrofitment: The process of converting an existing ICE vehicle into an EV by replacing its powertrain components.
• Circular Mobility Economy: An economic model in the transport sector focused on maximizing resource utility, minimizing waste, and extending the lifespan of vehicles and components.