Under the FAME India scheme, the government will support 15.62 Lakh vehicles via subsidies
The government cited three reasons for the slow implementation of the FAME India scheme, including high cost, range anxiety and fewer choices available
India has a total of 13.34 Lakh EVs on the road, making up 0.48% of the total road vehicles in the country
As of July 15, 4.75 Lakh electric vehicles (EVs) have been registered and sold under the second phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme by 58 original equipment manufacturers (OEMs), said the Minister of State for Heavy Industries Krishan Pal Gurjar.
The MoS replied to a question asked in the Lok Sabha yesterday (July 26) by BJP MP Pradeep Kumar Singh. The question was centred around 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.
The government said that under the FAME India scheme, the government will support 7090 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 via subsidies, only 30% are on the road.
Gurjar also cited three reasons behind the slow implementation of the FAME India scheme, which are mostly related to costs and consumer behaviour.
First, an EV costs more than its IC counterpart, which leads to lesser EV sales as compared to their IC variants. The second is consumer anxiety about the range of EVs. Third, there are limited choices in EV models compared 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.
However, the government has taken a few steps to bring the cost down.
Most importantly, 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.
Apart from that, the government announced a PLI scheme for manufacturing of Advanced Chemistry Cell (ACC) in the country last year to reduce battery costs and drive the pricing of EVs down. Further, EV makers will be eligible for incentives under the PLI scheme for automobiles and auto components as well.
Lastly, the government has increased the demand incentive for electric two-wheelers to INR 15,000/kWh from INR 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.
Amid all this, media reports from earlier this week suggest that India is working on a $5 Bn fund to support EV adoption in the country.
In a recent session in the Lok Sabha, the Ministry of Heavy Industries said that there are a total of 13.34 Lakh EVs on Indian roads. However, that number only makes for a fraction of a percentage of the total road vehicles in India, suggesting that there is still a long way to go in EV adoption in the country.
