Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India

Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India - is a part of the National Electric Mobility Mission Plan. The scheme envisages Rs 795 crore support in the first two fiscals starting with the current year.

"We are starting the scheme in metropolitan cities. Eventually the scheme will be launched in Smart Cities and all major cities across the country," Union Heavy Industries Minister Anant Geete said.He said the heavy industries ministry has estimated a total requirement of about Rs 14,000 crore for the scheme. Geete said the Phase-1 of the scheme will be implemented over a two year period in 2015-16 and 2016-17 with an approved outlay of Rs 795 crore, out of which Rs 500 crore will be spent on demand incentives.Elaborating how FAME would work out, he said: "The customer can get the incentive in the form of lower cost of hybrid or electric vehicles at the time of its purchase. Manufacturers can claim the incentive from the government at the end of each month."As per the scheme, depending on technology, battery operated scooters and motorcycles will be eligible to demand incentives ranging between Rs 1,800 to Rs 29,000. Similarly in three-wheelers it is from Rs 3,300 and Rs 61,000. In four-wheelers, the incentives range from Rs 13,000 to Rs 1.38 lakh, while in light commercial vehicles it is from Rs 17,000 to Rs 1.87 lakh, and for buses it is from Rs 34 lakh to Rs 66 lakh.

"Keeping in view the limited domestic reserves of the conventional fuels and the rising demand in the automobile sector, it is a dire necessity to find alternative sources of energy for transport which are eco-friendly yet cost-effective," Geete said at the launch. Exuding confidence that the move will help domestic manufacturers, Additional Secretary in the Heavy Industries Ministry Ambuj Sharma said: "Tata Motors is soon going to come out with a couple of offerings in the segment."Maruti SuzukiBSE 1.84 % is also ready with its Swift model with range extender technology, he said, adding many more models would come in future. Speaking on the occasion, Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur said: "This a giant step torward cleaner mobility. This is a new generation technology, which India has started late and with this we are going to make a beginning." The FAME scheme will also help domestic manufacturers to develop and sell their vehicle here and export them, he added.

The government had approved an initial outlay of Rs 75 crore from Plan Fund for the FAME-India scheme in the Budget for this fiscal. Geete said the scheme is aimed at supporting domestic manufacturers and help them compete with global peers. Due to the FAME scheme, Mahindra Reva's small electric car e20 will cost Rs 1.24 lakh lesser from its current prices of Rs 7.19 lakh and Rs 7.67 lakh (ex-showroom Delhi).
Based on the outcome and experience gained in the first phase, the scheme will be reviewed for implementation after March 31, 2017, with appropriate fund allocation in future. It entails provision of funds to the tune of Rs 260 crore and Rs 535 crore for the first two years, respectively, to be spent on technology platform (including testing infrastructure); demand incentives; charging infrastructure; pilot projects and operations.

Reference-Economic times(8,Apr,2015)