Parliament committee on electric mobility in India – progress report and recommendations

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A parliament standing committee presented its report on Electric & Hybrid Mobility – Prospects and Challenges in Automobile Industry – pertaining to the Ministry of Heavy Industries on 6th Dec 2021.

This write-up summarises our key takeaways from the report:

FAME progress report

FAME 1

FAME India (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India Scheme was launched on 1st April, 2015 for a period of two years with an outlay of 795 crores, which was extended upto 31st March, 2019 with an enhanced outlay of 895 crores.

– Total Vehicles supported – 2.8 lakhs

– Demand incentive distributed – 358 crores INR

– Electric buses deployment supported for – 425 e-buses in 9 cities at incentives worth INR 280 crores

– Charging infrastructure supported – Projects sanctioned for setting up 520 charging stations to the tune of 43 crores. Out of these, 392 charging stations have been installed.

Phase-II of FAME India was approved by the Government and notified on 8th March, 2019.

FAME 2

FAME 2 commenced from 1st April, 2019 with an outlay of INR 10,000 crores for a period of 3 years with an aim to support 7090 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2 Wheelers. The scheme was later extended till Mar 31, 2024.

MHI, under Phase-II of FAME India Scheme, has supported about 1.65 lakhs EVs as of Nov 25, 2021, by way of demand Incentive amounting to about Rs. 564 crores.

E-bus sanctions by MHI – 6265 e-buses sanctioned to 65 cities/STUs/State Government entities including 600 E-buses for intercity operations and 100 e-buses to Delhi Metro Rail Corporations (DMRC) for last mile connectivity.

Out of these 6265 electric buses, a supply order for 3118 electric buses has been issued as of 31st May 2021. Out of these 3118 buses, 437 electric buses have been deployed; 160 buses are deployed in the city of Mumbai, 150 buses in Navi Mumbai, 30 buses in Goa, 5 buses each in the city of Dehradun & Silvasa, 25 in the city of Patna, 12 in the city of Surat and 50 in Ahmedabad as on 31st May, 2021.

A total of 861 electric buses have become operational under FAME Scheme including 425 electric buses deployed in Srinagar, Jammu, Lucknow, Indore, Kolkata, Guwahati and Hyderabad, Mumbai under Phase-I of the Scheme.

Charging stations – 2877 charging stations sanctioned in 68 cities across 25 States/UTs. Letters of award for 1772 charging stations have been issued as of 31st May, 2021.

MHI had also invited proposals for the development of EV Charging Infrastructure (over 1550 charging stations) on major expressways/highways across India. Out of these 1550 charging stations, 300 charging stations are envisaged for Long Range/Heavy Duty Vehicles i.e., Electric Buses and 1250 charging stations are for Electric Cars, e2W & e3W.

Recommendations and Observations of the committee

As per EVreporter analysis, below are the actionable recommendations made by the committee:

1. Extend more incentives to electric 3W and 4Ws – The Committee appreciated the recent amendments made by the Ministry of Heavy Industries under FAME-II to increase the demand incentive from Rs. 10,000/- per kWh to Rs. 15000/- per kWh and increase in the cap on incentive for e-2W from 20% to 40% of the cost of vehicles. The committee suggested similar measures for e-3W & e-4W segments.

2. Extend incentives to EV Component manufacturing, R&D – The FAME scheme is limited to subsidizing EV purchase and charging infrastructure. The Committee suggested to include support for EV components development and R&D, Development of components for charging infrastructure & capital incentives for manufacturing xEV components.

At present, there is no government scheme for incentivizing the local manufacturing of EV components other than battery cells. The government may mull over bringing a scheme focused on localization of other critical EV components. The import duty of EV components should be raised only in a phased manner till such components are manufactured locally.

3. Enable start-ups to participate in the PLI scheme – The specification and criteria prescribed in PLI Scheme should be revisited to enable the Indian OEMs to be eligible for the PLI scheme as it is set at a high threshold and most of the existing OEMs in the EV industry are nascent and don’t qualify for the scheme.

4. Management of Battery Waste – The Committee recommends that the Government should ensure strict adherence to “Battery Waste Management Rules, 2020” by all stakeholders, for management of various types of waste batteries including lithium-ion batteries, and with the imposition of ‘Extended Producer Responsibility, producers of batteries would collect waste batteries, ensure its recycling and recovery.

5. One India One Policy – The Committee recommends to align the Central and State policies across the nation and create a ‘One India One Policy’ for Electric Mobility as this would give manufacturers a clear direction to invest and create demand and facilitate mass adoption of EVs.

6. LIVE integrated database of charging stations – The committee advised to have a live database of active charging stations installed all over the country and the locations readily available for the consumers.

7. Make financing easy – Availability of easy loans with lower interest and longer tenures will make it easier for the consumer to go for EVs. The committee suggested that the government should designate EV as a priority lending sector, especially financing for commercial fleets.