Green India Revolution: FAME II

Green India Revolution: FAME II

As part of a Rs 9,400-crore package for electric and hybrid vehicles, the government may offer incentives of up to Rs 2.5 lakh to those scrapping old petrol- or diesel-fired vehicles along with sops for investment to manufacture parts such as motors in the country.
Buyers of electric two-wheelers that cost up to Rs 1.5 lakh will receive incentives of around Rs 30,000, a draft policy formulated by the government has proposed.
There are more incentives for cab aggregators and bus fleet owners to go green. Buyers of electric cars, which will operate as taxis, are expected to get sops of Rs 1.5 to 2.5 lakh for vehicles that cost up to Rs 15 lakh.
The same sops will be available to individuals buying electric cars provided they scrap their pre-BS III vehicles and get a certificate from the approved scrapping centre, sources told.
While the sops for passenger vehicles and two-wheelers are expected to cost around Rs 1,500 crore over the next five years, around Rs 1,000 crore spending is planned to set up charging stations across the country.
According to the proposal circulated by the department of heavy industries (DHI), at least one charging point is planned every 9 sq km in all metros, million-plus cities and identified smart cities while a charging station on both sides of the highway is planned every 25 km along the Delhi-Jaipur, Delhi-Chandigarh, Chennai-Bengaluru and Mumbai-Pune stretches.
One of the major focus areas of phase-II of Faster Adoption and Manufacturing of (Hybrid & Electric) Vehicles (FAME) will be on public and intermediary transport, which include taxis and three-wheelers. The plan awaiting the government approval is expected to come as a major setback to the automobile industry, which wanted sops for all types of electric vehicles. The industry is working out its strategy based on the assumption that the government will offer incentives to make electric vehicles more attractive. 
This scheme will also be offered to three wheelers, buses, trucks and ligh commercial vehicles. All in all, the Indian government hopes that such discount schemes/rebates on electric vehicles will see more buyers opting for such vehicles quickly. Moreover, the government is in the process of reducing GST on batteries for electric vehicles, and this is likely to make electric vehicles sold in India cheaper than before. Such rebates are also likely to encourage car and two wheeler makers to come up with more attractively priced electric vehicles.
For now, the electric car space in India has just two offerings, both from Mahindra Electric. The E20 4 door is one such offering while the other is the eVerito. Tata Motors is likely to introduce the electric variants of the Tiago and Tigor soon. Next year, Hyundai plans to bring in the Kona Electric SUV. Mahindra’s future plans include the electric variants of the KUV100, the XUV Aero and the S201 compact SUV. Maruti also has plans to enter this space in 2020, with a new electric car developed in collaboration with Toyota.
With an aim to promote eco-friendly vehicles, the government had launched the Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) schemein 2015 offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars. Under FAME II, the source said demand aggregation will be attempted for city buses, electric three-wheelers and electric four-wheeler taxi segment to bring down the cost of vehicles. Agencies such as EESL, ASRTU (Association of State Road Transport Undertakings) could beconsidered as potential aggregators.
Moreover, large EV components such as motor, drive powertrain and controller which are currently not covered under modified special incentive package scheme (MSIPS) of the Ministry of Electronics and Information Technology have been proposed to be given capital investment subsidy at a rate of 20-25 per cent of capital investment under FAME II, the source added.
ADVERTISEMENT
As per the information available from the Start Up Team of Invest India, about 136 startups related to electric vehicles exist in India.
However, these startups are not getting access to required finance, as financial institutions are reluctant to extend credit facilities to them, the source said, adding it was one of the main reasons for consideringestablishment of a venture capital fund related under FAME II.
A major reasons for the low intake of credit facility is the high risk associated in this sector. In order to support such high risk startups, it is proposed that the venture capital fund of Rs 500 crore be set up under the second phase of FAME, the source said.
The main thrust of the venture capital funding will be for development of zero emission vehicle and its component manufacturing base, making prototype to manufacturing and development of R&D, promoting work on alternative battery chemistries among others, the source said
The demand incentive will cover a little over five lakh electric vehicles and over 80% of these will be twoand three-wheelers. The government plans to spend about Rs 5,800 crore to push demand for electric vehicles to “reduce the cost” of such vehicles to make them affordable.
A section in the government, however, is of the view that the entire incentive scheme, covering around five lakh vehicles, is only 0.5% of the country’s current annual vehicle production. “If the target is to reduce emission of greenhouse gases, should we not focus on improving public transport by deploying more buses running on cleaner fuel?” asked an official.
For the same amount (Rs 5,800 crore), at least 50 lakh buses can be run across the country, on the lines of orange buses in Delhi, on ‘operation-expenditure model’, sources said.
For manufacturers of electric vehicle components such as motor, drive, powertrain and controller, the government has proposed to provide special capital investment subsidy up to 25 per cent.

Watch video

Comments are closed.