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Indian Government Electric Vehicle Policies and Subsidies


Indian Government Electric Vehicle Policies and Subsidies

The entire world has been using petroleum to run its vehicles. Biofuels such as biodiesel and ethanol contribute to about 5% of the total production. While on the other hand, natural gas accounts for about 3% of the total production and most of which is used in natural gas pipeline compressors. But these are all non-renewable sources of energy and they are quite limited. While on the other hand, tidal energy, wind energy, solar energy, hydroelectricity are all renewable sources of energy and can be used till the very existence of nature. Since, it is estimated that by 2050 A.D., there might be petroleum crisis in the world and most of the petroleum reserves might run dry, the governments of most of the nations has come to a consensus to start the use of the renewable source of energy by converting it into electricity. Hence, much focus has now been given on hydroelectricity, wind energy, tidal energy, and so on and so forth. These are all renewable sources of energy and there is no raw material cost in this as all are available for free which is supplied by nature itself. Hence, the entire shift, focus, and the eye is on the renewable source of energy and most importantly electricity. This is why, most of the countries have started the production of Electric Vehicles (EV) and India is one of them.

Indian Government Electric Vehicle Policies and Subsidies

Prime Minister's Initiative

          After coming to power, Narendra Modi, the Prime Minister of India has announced many green initiatives, one after the other. However, these all have turned out to be red herrings that have finally succeeded only in drawing the attention away from technologies that can deliver the required non-fossil fuel energy. The Prime Minister of India, Narendra Modi's first commitment was to set up a 100,000 megawatt of solar power generating capacity by the year 2022 and has got off at a brisk pace. While in 2015, 2,133 megawatt of generating capacity was added. In the following year in 2016, 4,000 megawatt was generated. There is a target of generating 10,000 MW for which the construction is under process and the result might be announced very soon. Moreover, 84,000 MW to be constructed in the next four years and so. The task seems quite difficult but the government has raised its solar power target to 2,50,000 MW by 2030 A.D. But, there is a point to ponder, the impact of these will have on carbon emission which is debatable again.


Indian Government Electric Vehicle Policies and Subsidies


National Electric Mobility Mission Plan 2020

          India has unveiled the "National Electric Mobility Mission Plan 2020" in 2013. This has been done to address the issues of the vehicular pollution, growth of domestic manufacturing capabilities and national energy security. The Government of India (GOI) has made some commitment with the Paris Agreement, to make a major shift to electric vehicles by the year 2030 A.D. Many E-commerce companies, and Indian car manufacturers like Reva Electric Car company have made plans to produce more electric cars within the next decade. Moreover, the Indian app-based transportation network company like Ola is also working on the same and is targetting to produce electric vehicles within the next few years.


Indian Government Electric Vehicle Policies and Subsidies


Indian Government's Electric Vehicle (EV) Policy

                         The Indian government has launched the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme. This was approved for a two year period of 795 Crore Indian rupee in the year 2015. This scheme has been extended till September 2018. Now the focus is on the demand creation, pilot projects, technology development, and charging infrastructure. The government is now planning to extend the financial support of 8,730 Crore for three years under Phase II of FAME. It has been planned by the government to deploy electric buses on the Indian roads soon. This idea came from the response received by the Centre during the Phase I of FAME (in between 2015-2018). It is during this period that around 47 proposals were received which demanded the deployment of 3,144 buses in 44 cities. Moreover, there was no fixed deadline or timeline by either the Central or the State government to make a shift to change all the buses from the current state to EVs. 5595 electric buses were sanctioned to 64 cities and also the State Transport Unions (STUs) while 5095 units were for Intra-city transport out of it. There are around 1.95 lakh buses which run under several State Transport Unions in all India. The fund support for it includes 2,500 Crore Indian rupees for buses; and 1,000 Crore Indian rupees for four-wheeler vehicles; and 750 Crore Indian rupees for high-speed three-wheeler vehicles; and 600 Crore for two-wheeler vehicles (which runs at a maximum speed greater than 25 KM). And with this policy, the Government of India is now planning to prioritize the development of shared mobility, public transportation, and the smaller EVs like two-wheeler vehicles.


Indian Government Electric Vehicle Policies and Subsidies


Moreover, the Government of India backed Energy Efficiency Services Limited (EESL), has issued tenders for 20 thousand electric vehicles to be deployed across the country solely for government use. Not only this, but the government also aims the electronic vehicle sales penetration of 30% for private cars, 40% for buses, 70% for commercial vehicles and 80% for 2 and 3 wheeler vehicles by the year 2030. On top of that, the government has also approved green license plates for electric vehicles so that people will be encouraged by it. The hidden purpose behind this is that they can easily identify them for the proposed benefits like preferential treatment of vehicles during parking, concessional toll fees and free entry into congested zones.

Subsidy for Buyers under FAME India

          In February 2019, the Union Cabinet chaired by the Honourable Prime Minister of India Shri Narendra Modi had approved the proposal for the implementation of the scheme "Faster Adoption and Manufacturing of Electric Vehicles in India Phase II" (FAME India Phase II), and this was done for the promotion of the electric mobility in the country.
In the same year, Prakash Javedkar, the Minister of Heavy Industries and Public Enterprises informed the Lower House that Rs 360 crore subsidy has been given to 2,85,000 EV buyers under FAME India. About 2.85 lakh buyers were supported and were given subsidy. Moreover, he added that the benefits of the incentives to the buyers of mild hybrid vehicles under the Faster Adoption and Manufacturing Of Hybrid and Electric Vehicles (FAME-India) scheme was withdrawn from 1st April, 2017 which was based on the third-party evaluation of Phase I of FAME India Scheme.
          Not only this, the official release of Ministry of Heavy Industries and Public Enterprise informed that "The Phase-I of the FAME India Scheme was launched in 2015 and continued up to 31st March 2019. Based on outcome and experience gained during the Phase-I of FAME India Scheme and after having consultations with all stakeholders including Industry and Industry Associations, the second phase of FAME India Scheme has commenced from 01st April, 2019 for a period of 3 years."
          Till 2019, the Indian Government under the FAME India Scheme has supported around 2.85 lakh buyers of the electric vehicles with a collective subsidy of Rs 360 crores.


Indian Government Electric Vehicle Policies and Subsidies


Finally, it has to be mentioned that despite the sharp decline in the Financial Year 2019 (FY19) of the Indian automotive industry, the Electronic Vehicle (EV) is expected to grow in the coming years. Not only this, with the BS-VI emission norms which became applicable in 2020, the Electronic Vehicles will become quite price competitive with the conventionally available fuelled vehicles, thus accelerating the sales. The condition of EVs in India looks quite promising and the future of India looks green.

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