In line with the Phase II of Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India, 4.75 lakh electric vehicles (EVs) have been registered and sold as of 15th July, as stated by the Minister of State for Heavy Industries Krishan Pal Gujar.

Replying to a question asked in the Lok Sabha (July 26), the MoS further informed that oil marketing companies under the Ministry of Petroleum and Natural Gas have established around 3,448 EV charging stations at retail outlets. The question was in line with the slow implementation of the FAME India scheme and the steps taken by the government to bring the costs of electric vehicles on par with their internal combustion (IC) counterparts. Electric Vehicles Market: 1 in 2 Cars Sold Will Have Electric Powertrain by 2030, Says Report.

The Story So Far

As per the government, under the FAME India scheme, the idea is to support 7,090 e-buses, 5 lakh e-three wheelers, 55,000 e-passenger cars and 10 lakh e-2 wheelers. Out of the total 15.62 Lakh vehicles, the government aims to support only 30% on the road, via subsidies. The Minister cited three major reasons that are responsible for slowing the process of implementation of the FAME India scheme, which is mostly concerned with the cost and consumer behaviour.

1. It is important to note that an EV costs more than its IC counterpart, which leads to fewer EV sales in comparison to their IC variants.

2. The second point mentioned is regarding consumer behaviour. It is mostly connected with consumer anxiety about the range of EVs.

3. For now, there are limited options in EV models to choose from in comparison to internal combustion vehicles. This is especially true for electric cars in India as only a handful of carmakers are bringing out EVs for India.

Government interventions to solve EV issues

In order to bring the cost down, the government has taken a few steps in the right direction. The foremost thing to mention is that the government has reduced the GST on electric vehicles to 5% and on charging stations to 5% as well, from 12% and 18% respectively. Further, it has forgone road tax for EVs and all EVs will get green licence plates, which also exempts them from permit requirements.

PLI scheme for manufacturing of Advanced Chemistry Cell (ACC) was also announced by the government last year in order to reduce battery costs and drive the pricing of EVs down. In addition to this, EV makers are also made eligible for incentives under the PLI scheme for automobiles and auto components as well.

Also, it is pertinent to mention that the demand incentive for electric two-wheelers was increased to Rs 15,000/kWh from Rs 10,000/kWh. It has also increased the cap from 20% to 40% of the cost of the vehicle from 11th June 2021. This move will enable the cost of electric two-wheelers to be at par with that of ICE two-wheelers.

What is the FAME II scheme?

In order to promote the manufacturing of electric and hybrid vehicle technology, Phase I of the FAME scheme was launched for a period of 2 years, commencing on 1st April 2015, which was subsequently extended from time to time and the last extension was allowed up to 31st March 2019. At the onset of the subsequent success of Phase 1 which noted 520 sanctions for the charging stations, the Ministry of Heavy Industries (MHI) in Phase II of the FAME India scheme sanctioned a Rs 10,000 crore budget for the installation of charging infrastructure for EVs. Out of total budgetary support, about 86 per cent of the fund has been allocated for Demand Incentive so as to create demand for EVs in the country.

Another ado to the scheme has been the nationwide ‘Go Electric’ Campaign which was launched back on February 19, 2021, by the Ministry of Power, Ministry of Road Transport and Highways, Ministry of Heavy Industries, and NITI Aayog collaboratively. The campaign aimed to educate the general public on the benefits of e-mobility, informing the potential EV owners of various government incentives for EV adoption, generating curiosity, and transforming the same into demand.

(The above story first appeared on LatestLY on Jul 28, 2022 12:27 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).