By Manvi Gupta, Faculty of Law, University of Allahabad.

The FAME India Scheme [Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles], launched in 2015, under the National Electric Mobility Mission (NEMM), aims at promoting eco-friendly vehicles in the country. It is being directed by the Heavy Industries Ministry.

The National Electric Mobility Mission Plan 2020, was unveiled in 2013, considering the growing levels of environmental pollution and the need for fuel security, with an aim to promote electric mobility in the country. The Government is determined to attain 60-70 lakh sales of hybrid and electric vehicles by 2020 under this plan.

The Scheme provides for fiscal and monetary incentives for adopting and creating a market for both hybrid and electrical vehicles in the country. Its objective is to incentivize all vehicle segments, including two-wheelers, three wheelers, passenger four-wheeler vehicles, light commercial vehicles and buses. This scheme is sought to be implemented over a span of six years (2014-2020) and is one of the green initiatives of the Government of India.

To meet its commitment to the Paris Agreement, the Government is planning a chief shift to electric vehicles by 2030. This format aims at realizing sales of six to seven million electric and hybrid electric vehicles every year, beginning 2020. It proposes to achieve about 9500 million litres of cumulative fuel savings, which would result in the reduction of emission of greenhouse gases. The shift to electric vehicles is significant in the present scenario as it will reduce fuel imports and pollutants.

The scheme focuses on the following four ambits:

  1. Technology Development
  2. Demand Creation
  3. Pilot Projects
  4. Charging Infrastructure

ADMINISTERING AUTHORITY

Administered by the Heavy Industries Ministry, the proposal embraces hybrid and electric technologies like strong hybrid, plug-in hybrid and battery electric vehicles. It compulsorily supports the hybrid and electric vehicles’ market development, and its manufacturing ecosystem in the country, to help the sector realize self-sustenance within a specified period. The government as well as the private sector has increased the much-required investment in the back-end infrastructure, to achieve the Centre’s electrical vehicle target by 2030.

In order to receive benefits under the scheme, the original equipment manufacturers (OEMs) have to mandatorily seek consent from the Department of Heavy Industry (DHI), prior to accepting any offer to deliver electric buses. This move is aimed at smoothening the roll out and management of demand incentives for e-buses, under the scheme.

INITIATIVES OF THE CENTER

The Centre provided direct support to more than 49,000 electric and hybrid vehicles between November 2016 and June 2017, which provided the necessary acceleration to this scheme. Earlier, it had provided support for 99,000 vehicles between April 1, 2015 and November 2016.

In the second week of September, the Energy Efficiency Services Limited (EESL), floated their first tender for 10,000 EVs and 4,000 charging stations in Delhi/NCR. The tender was awarded to TATA Motors. An agreement for the purchase of 10,000 EVs was signed between government-owned EESL and Tata Power, in September 2017. Other companies that participated in the bidding include Toyota, Maruti Suzuki and Hyundai, among others. TATA Motors has conducted a road test of the Nano EV (a revamped version of TATA Nano) in Coimbatore.

NBCC (India) Ltd (Formerly National Buildings Construction Corporation Limited) has signed a memorandum of understanding with Fortum Oyj, a Finnish Clean Energy Company, for bringing cloud-based back-end charging infrastructure for electric vehicles to India. A 22 KW AC charger has been inaugurated by Fortum in Delhi on a pilot basis. Ola and Indian Oil launched the country’s first charging station in Nagpur. The charging station has been launched at one of Indian Oil’s petrol/diesel stations. The Center has also installed 25 charging stations in Bengaluru.

The government is also proposing to give incentives to cities with population more than 1 Million. This proposal aims at promoting the use of EVs in multimodal public transport to help lower the pollution levels in urban areas. The cities will be selected on the basis of average pollution level, number of registered vehicles and ranking under the Swachh Bharat Abhiyan. The incentives will be used only to buy electric buses, three-wheelers and passenger cars running on new generation batteries, with traces of lead, like lithium polymer, lithium iron phosphate, nickel metal hydride and zinc air, among others. The grants could also be given to States with special category status.

In an attempt to achieve 100% electric vehicles by 2030, the government announced a tax reduction on electric vehicles, upto around 12%, with the roll-out of GST.

NITI Aayog, the policy think tank of the Government of India, is currently developing a roadmap of India’s Electric Vehicle Mission 2030, and has put forward a plan for domestic battery manufacturers to produce batteries for EVs under the “Make in India” scheme. It recently stated that the transition to all-electric cars could create a $300 Billion market for EV batteries in the country by the end of next decade.

INITIATIVES OF THE STATES

The Karnataka government became the first State to pass an Electric Vehicle and Energy Storage Policy, for raising $4.83 Billion for EVs. The Telangana government has also created a draft policy on electrically-powered vehicles.

The DHI has given its approval to the Karnataka government for purchase of electric vehicles. The State will purchase 40 electric buses, 100 four wheelers and 500 three wheelers while availing 60% subsidy under the scheme. A subsidy support is also being provided for setting up electricity charging infrastructure across Bengaluru.

INCREASE IN THE ELECTRIC VEHICLE MARKET

Mahindra and Mahindra is partnering with Zoomcar, a self-drive car rental platform. This Bengaluru-based startup will be deploying 20 units of Mahindra’s all-electric smart car, e20Plus along with two charging units in Mysuru.

Japanese automakers, Suzuki and Toyota, have their eyes set on the Indian EV market. The two auto motor maker giants, Toyota and Suzuki, have partnered up to launch EVs suitable for Indian traffic and road conditions by 2020. As per the memorandum of understanding, Toyota will provide technical support for the project, while Suzuki will handle the manufacturing part of it.

The electric vehicle market is on track to receive a major boost as the large sharks of the automotive sector, Honda, Suzuki, Toyota & TATA Motors, are also planning to waltz into this arena. Triggered by the scheme, Sundaram Fasteners Ltd and the Sona Group are aiming towards making these vehicles affordable for the common masses.

CONCLUSION

Though this scheme seems to have been developed keeping in mind the best interests of the environment, it is infested with a few shortcomings as well. The government’s aim to achieve 100% electric vehicles by 2030 will drastically affect the business of the already prevailing auto component industry. Many of these companies are thus trying to hop onto the wagon, by shifting their investments.

This scheme, by and large, aims at reducing the carbon trapped in the atmosphere, thereby greatly helping in improving the dire situation of smog in Delhi and neighboring cities and is thus expected to curb the pollution caused by the road transportation sector. Let’s see how this scheme fares out in the long run.