Electric Vehicles(EVs)Policies of India

In Context 

The EV policies put in place by some States as part of FAME-II have been instrumental in driving this growth.

Indian Policies on EVs

• The government introduced a slew of measures in line with the ‘Make in India’ campaign to incentivise manufacturers to produce components locally and build a structured policy framework as India is heavily dependent on China for lithium supply chains constraining the widespread deployment of EVs.

• In 2010, the Ministry of New and Renewable Energy (MNRE), announced a financial incentive for manufacturers for EVs sold in India.
  • The Rs 95-crore scheme envisaged incentives of up to 20 per cent on ex-factory prices of vehicles, subject to a maximum limit.
  • It was the first concrete decision to incentivise EVs. However, it was withdrawn by the MNRE in March 2012.
• In 2013, India unveiled the National Electric Mobility Mission Plan (NEMMP) 2020.
  • It aimed to make a major shift to EVs and to address the issues of national energy security, vehicular pollution and growth of domestic manufacturing capabilities.
  • It offered subsidies and created a supporting infrastructure for e-vehicles but the plan has not been implemented.
• In the Union Budget 2015-16, the ‘Faster Adoption and Manufacturing of EVs’ (FAME) scheme was announced, with an initial outlay of Rs. 75 crore.
  • It aimed to offer incentives for clean-fuel technology cars to boost their sales to up to 7 million vehicles by 2020.
• In 2017, the Transport Ministry highlighted its intent to move to 100 per cent electric cars by 2030.
  • However, the automobile industry raised concerns over the execution of such a plan, so the government subsequently diluted the plan to 30 per cent.
• In February 2019, the Union Cabinet cleared an Rs. 10,000-crore programme under the FAME-II scheme for promotion of Electric Mobility in the country.
  • Objective
    • To encourage faster adoption of electric and hybrid vehicles by offering upfront incentives on the purchase of EVs.
    • Also by establishing the necessary charging infrastructure for EVs.
    • The scheme will help in addressing the issue of environmental pollution and fuel security.

• Initially envisioned for three years, FAME-II got a two-year extension in June 2021 owing to a number of factors including the pandemic.
•  It aims to support 10 lakh e-two-wheelers, 5 lakh e-three-wheelers, 55,000 e-four-wheeler passenger cars and 7,000 e-buses. 

• In the 2022 budget, a battery swapping policy was announced as an easier way to charge EVs. 
  •  The battery swapping model for supplying power has side-stepped the lack of charging infrastructure but the future is likely to see a mix of both models.
• The government also announced a Production Linked Incentive scheme for automakers, a part of which aims to boost electric vehicles manufacturing.

Challenges /Issues 

• India’s road to a fully-electric ecosystem still has a few hurdles – High cost, inadequate infrastructure, lack of high performing EVs .
•  Local manufacturing enterprises lack the necessary resources or the motivation to invest in design developments.
• The absence of a robust manufacturing ecosystem for the materials associated with the EV revolution, coupled with the concentration of the supply chain in certain regions.
• Li-ion batteries are complex devices requiring a level of sophistication that can take years to perfect. 

• Hurrying the development of this complex technology without careful safeguards can lead to increasing safety incidents, as evidenced recently on Indian roads.

• The success in the e-three-wheeler space has been difficult to replicate in the e-two-wheeler and e-four-wheeler space, which have problems both on the demand and supply side. 

Way Forward 

• The current policies in place at the State level have spurred an e-three-wheeler dominance but it has come at some costs therefore subsequent EV policies must pay special attention to adequate passenger safety. 
  • Future policies must therefore incorporate appropriate design and passenger safety standards. 
• Future EV policies must take into account the existing and emerging stakeholders on the demand and supply sides for effective implementation.
• With the prevailing trajectory of EVs, India must take lessons from its e-three-wheeler success story to sustain its EV ambitions.