After months of speculation about the continuity of subsidies provided to electric vehicle purchases, the government has finally come out with a new scheme named PM E-Drive. This scheme will supersede the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme, which expired in March.
PM E-Drive, under the Ministry of Heavy Industries, has a total budgetary outlay of Rs 10,900 crore for two years. The scheme will cover the purchase of electric two-wheelers, electric three-wheelers, electric trucks and buses as well as electric ambulances. Apart from these, the scheme will also support 22,100 electric vehicle public charging stations. However, electric cars will not get an demand incentives.
“Subsidies/demand incentives worth Rs 3,679 crore have been provided to incentivize e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs. The scheme will support 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses,” the government said.
There is a provision for procuring 14,028 electric buses by state transport units and other public transport agencies.
“The demand aggregation [for e-bus] will be done by CESL in the nine cities with more than 40 lakh population namely Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune and Hyderabad. Intercity and Interstate e-buses will also be supported in consultation with states,” the government said.
The proposes the installation of 22,100 fast chargers for electric four-wheelers, 1,800 fast chargers for electric buses and 48,400 fast chargers for electric two- and three-wheelers with an outlay of Rs 2,000 crore.
Currently, electric vehicle adoption in India is at its nascent stage with overall penetration close to 7%. Two-wheelers accounted for 56% of the electric vehicle sales in the last financial year, while three-wheelers constituted 38%.
Affordability and limited charging infrastructure have been major hurdles in the faster adoption of electric vehicles.
The subsidies given on the purchase of electric vehicles are instrumental in driving the early-stage adoption of electric vehicles as incentives help in reducing the upfront cost of the vehicle.
Most of the electric vehicle OEMs have been advocating the need for subsidies to continue till the market matures.
It was followed by FAME 2, rolled out in 2019 with an initial outlay of Rs 10,000 crore for three years ending in 2022. The scheme was later extended to March 2024 with an additional outlay of Rs 1,500 crore.
FAME 2 had a target to support 10,00,000 (1 million) electric two-wheelers, 5,00,000 electric three-wheelers, 55,000 electric four-wheelers and 7,000 electric buses.
The scheme supported 11,70,241 (1.7 million) two-wheelers, 130,283 three-wheelers, 16,631 four-wheelers and 4,766 buses.
After the expiry of FAME 2 in March, the government launched a temporary EMPS 2024 with an outlay of Rs 500 crore. The EMPS was initially valid for four months till July 31 but was extended till September end. The outlay was also boosted to Rs 778 crore.
Unlike the FAME 2 scheme, EMPS provides incentives only to electric two- and three-wheelers that too a reduced level. Electric four-wheelers were not included in it. The scheme has a target of 560,789 electric vehicles, comprising 500,080 e-2Ws and 60,709 e-3Ws.
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