Government’s Commitment to EV Ecosystem Expansion
In a significant move announced during the Interim Budget 2024, the government reiterated its commitment to bolstering the electric vehicle (EV) ecosystem in India. The focus is on strengthening manufacturing capabilities and charging infrastructure to facilitate the widespread adoption of electric vehicles.
Impressive Growth in EV Sales
Notably, 2023 witnessed remarkable growth in EV sales across various segments. According to data from the Federation of Automobile Dealers Associations (FADA), electric passenger vehicles saw a substantial increase of 114.71%, electric commercial vehicles surged by 114.16%, electric three-wheelers rose by 65.23%, and electric two-wheelers climbed by 36.09%.
Incentives and Schemes Driving Progress
To propel the EV ecosystem, the government has implemented several key initiatives. The Production Linked Incentive (PLI) schemes for the automobile and auto component sectors, along with the Advanced Chemistry Cell (ACC) battery storage, aim to boost domestic manufacturing and attract investments. The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, in its second phase, provides subsidies and incentives for EVs, supporting public and shared transportation electrification.
Financial Outlay and Industry Response
The PLI scheme for the automobile and auto component sectors, with a total outlay of Rs 25,938 crore over five years, has already garnered substantial interest. Notably, investments of Rs 11,958 crore have been reported till Q2 FY24. Similarly, the PLI scheme for ACC battery storage, with an outlay of Rs 18,100 crore for seven years, is poised to enhance manufacturing capabilities, with approved firms committing significant investments.
FAME II Scheme Impact
Under the second phase of the FAME scheme, the government has successfully incentivized the sale of over 1.1 million EVs, disbursing subsidies amounting to Rs 5,228 crore as of December 1, 2023. The scheme, with an outlay of Rs 10,000 crore over five years, supports the electrification of various vehicle segments and encourages the creation of charging infrastructure.
Finance Minister’s Assurance
Presenting the Interim Budget 2024, Finance Minister Nirmala Sitharaman affirmed the government’s dedication to expanding and strengthening the EV ecosystem. The focus on manufacturing, charging infrastructure, and incentives underscores the administration’s proactive stance towards sustainable and eco-friendly transportation solutions.