That is the question that EESL should be asking !
Economic Times ( 07 Oct )
carries following news report :
“
EESL Plans to let Private Sector
into EV leasing “
Energy Efficiency
Services (EESL) plans to open up vehicle leasing programmes to private institutions in its push towards vehicular
electrification.
The firm, which recently awarded a tender for
procuring 10,000 electric vehicles (EVs), said the contract was the first of
many as there are over half a million
vehicles with the Centre waiting to be replaced with those
equipped with electric power trains.
There are also
opportunities in the corporate market for leasing EVs.
EESL managing director Saurabh Kumar told ET, “ We may open up to
private institutions... They can set up charging points for vehicles leased in the company name and in that way
avoid regulatory hurdles over the sale of electricity.”
At present, the
Electricity Act prohibits the sale of electricity by anyone except the
distribution licensee.
If a private firm sets up charging points for vehicles leased under the company name for use by
employees, the regulatory hurdle can be eased and at the same time,
environmental concerns will stand addressed.
“We have specified a minimum range of 130 km for
the EVs we are procuring in the tender. Most vehicles used in intra-city
operations cover a daily distance of 80 km.
Corporates can have charging stations in offices for powering leased vehicles
when idle. Even after taking the tariff for electricity into account, the operating cost of an EV is one-sixth of that of a
petrol one,” Kumar added
Bulk acquisition of EVs by EESL, Kumar said, would
help bring down purchase price and spur demand. “Leasing will work in the commercial space. And also help
bring down procurement costs,” said VG Ramakrishnan, managing partner, Avanteum
Partners LLP.
Overall, EESL
plans to acquire 10000 electric vehicles for replacing the fleet in the power,
coal, new and renewable energy ministries by June 2018.
There is no doubt , as compared to
buying / owning EVs , private commercial companies would benefit by leasing out
the cars from EESL
Companies ( leasing the electric cars from EESL ) , can write off the
lease-rent as tax-deductible
expense
But EESL – the car-owning company ( the company leasing out
those cars ) , can only claim, 10 % depreciation !
And just sell off those “ owned “ cars as SCRAP , after 5 years !
Therefore , it makes sense , even for EESL itself , to float a tender for “ leasing “ rather than for “ buying “ those 10,000
cars
Apart from this , there are other reasons why I advocated that EESL itself should float
a tender for “ Leasing “ instead of “ Buying “ those 10,000 EVs
Read my blogs :
=================================
=================================
=================================
And should EESL “ lease “ these cars from TATA / M&M , I don’t think , there
is any law which would prevent EESL to, in turn , sub-lease these very cars
to government departments or to private commercial firms !
So , this leasing ( instead of buying ) , would save the government
exchequer , a huge sum ( Rs 1100 crore ) by way of initial investment
And , as explained in my above-mentioned blog :
·
EESL could lease these ( 10,000 ) cars ( from TATA / M&M ) at Rs 15 per km
·
EESL would sub-lease these to Govt
Departments at Rs 27 per
km
Hence , per km , EESL would make a gross margin of Rs 12 ( Rs 27 – Rs 15 )
For 20,000 km / year / car , that
would amount to gross margin of Rs 2.4 lakh
For 10,000 cars , that would add up
to , Rs 240 Crore !
And , that Rs 15 / km ( Rs 3 lakh/car/year ) that
EESL would pay to TATA / M&M by way of “ lease rent “ , would be treated as
“ tax deductible expense
“ !
A neat sum of Rs 300 Crores !
IT
MAY BE POSSIBLE TO STILL AMEND THE ORDER FOR THE BALANCE 9,500 CARS
“ Outright
Selling “ of cars by car-manufacturers , translates
into “ Car Ownership “ ( for who-so-ever is the buyer , even a private
citizen )
This is something that Shri Nitin
Gadkari wants to get away from , in order to promote the concept of “ Car as a Transporting Service “
, through more public transport
No doubt , Electric Vehicles will
reduce air pollution
But “ Electric
Public Transport “ will not only reduce air pollution
, it will also dramatically reduce “ Traffic Congestion “
Question
is :
How can government discourage “ Private Ownership “ of
vehicles ( even if electric ) and encourage “ Electric
public Transport “ ?
Here are some suggestions ( - some
covered by my earlier blogs ) :
=================================
#
Incentives to Electric Vehicle Manufacturers :
( to
become global exporters of EV , as suggested
by Shri Amitabh Kant , CEO – NITI Aayog )
·
Reduce GST from 12 % to 5 %
·
Reduce Customs Duty on Lithium-ion
Batteries from 26.5 % to 12 %
·
Make “ Lease Revenue “ exempt from corporate income tax ( = cheap self finance for working capital needs of the manufacturers ? )
·
Make “ Scrap Value “ ( upon expiry of lease term of
leased cars ) , tax exempt
·
Make available for FREE , ISRO technology
for 50 Ah / 100 Ah
lithium-ion battery packs ( under development by Automotive Research
Association of India )
·
Direct Benefit Transfer ( DBT ) of
the Carbon Credits earned , into the accounts of EV Manufacturers , as
detailed in earlier blog “ Piyush Plan
“
Only with such “ Out of the Box “
reforms , it will be possible for Auto Industry to gear up for a 10 % EV production increase each year ,
so as to reach 100 % in
ten years , between 2020 – 2030
=================================
#
Incentives to “ Electric Public Transport “ owners ( taxies / buses / rickshaws etc ) :
·
No GST on
provision of “ Transport Services “ to corporates or individuals
·
No
road tax / municipal taxes
·
Free charging at Charging Stations set up by PSUs ( NTPC – BHEL –
IOC – HP )
·
Free parking in “ Pay-and-Park “ plots
·
No income tax ( personal or corporate ) on business income
==================================
#
Incentives to CITIZENS
, for using PUBLIC
TRANSPORT :
·
Incentive Scheme for citizens who
wish to exchange
their existing petrol / diesel vehicles ( 2 wheeler / 4 wheeler ) for Electric Vehicles
·
Incentive Scheme for citizens who do not own ANY vehicle and
buying an EV
=================================
#
Incentive for large Co-operative Societies who come forward to set up
Battery
Charging Station within the society premises , for use by Members and
the Public
================================
Dear Shri Gadkariji / Shri Amitabh Kantji :
I hope some of the above mentioned
suggestions will find a place in the Road Map for Electric Vehicles
11
Oct 2017
