Policy Drivers That Lead To The Growth of The Electric Vehicle(EV) Sector In India
Policy Drivers are considered as one of the key aspects that promote the growth and development of a business sector in a country. India has been ranked as the third-largest emitter of Greenhouse Gases after the USA and China. This has been a major concern that needs to be tackled. The central and the state governments have been working on innovative policies that have nurtured many leading and new companies that have started to work towards greener mobility systems. In this blog, I would be telling you about the policies implemented by the state and the central government that nurtured the growth of EVs in India.
Why Electrical Mobility System is important for a developing country like India?
According to the Bureau of Energy Efficiency which is under the Ministry of Power, Government of India ;
The transport sector accounts for 18% of total energy consumption in India. This translates to an estimated 94 million tonnes of oil equivalent (MTOE) energy. If India were to follow the current trends of energy consumption, it would require an estimated 200 MTOE of energy supply annually, by the year 2030 to meet the demand of this sector. The transport sector also contributes an estimated 142 Million Tonnes of Carbon Dioxide emissions annually, out of which 123 million tonnes is contributed by the road transport segment alone.
The Government of India has committed that it would strive hard to reduce the emission intensity by 33- 35% by 2030 from 2005 levels at the COP 21 held in Paris, France.
Electric mobility can be considered as a viable alternative in addressing these challenges, when coupled with innovative pricing solutions, appropriate technology and support infrastructure and thus, has been on the radar of the Government of India. Thus this needs the policymakers at the union and the state level to create an environment that would nurture the growth of the EV sector in the country.
Central Government’s EV Policy
The National Electric Mobility Mission Plan (NEMMP) 2020
The National Electric Mobility Mission Plan (NEMMP) 2020 was launched by the Government of India in 2013 with the objective of achieving national fuel security by promoting electric and hybrid vehicles in the country. The plan set an ambitious target to achieve 6–7 million sales of hybrid and electric vehicles year on year from 2020 onwards. It is a composite scheme using different policy-levers are as follows :
(i)Demand-side incentives to facilitate the acquisition of hybrid/electric vehicles.
(ii)Promoting R&D in technology including battery technology, power electronics, motors, systems integration.
(iii)Promoting charging infrastructure.
(iv)Supply-side incentives.
(v)Encouraging retro-fitment of on-road vehicles its hybrid kit.
Phase I of The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles India Scheme
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) is a Scheme under The National Electric Mobility Mission Plan (NEMMP) 2020 was implemented in the year 2015 to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth.
The Phase-I of this Scheme was initially launched for a period of 2 years, commencing from 1st April 2015, which was subsequently extended from time to time and the last extension was allowed up to 31st March 2019. The scheme covers Hybrid & Electric technologies like Mild Hybrid, Strong Hybrid, Plug-in Hybrid & Battery Electric Vehicles.
The 1st Phase of the FAME India Scheme was implemented through four focus areas. The four areas are as follows:
(i) Demand Creation,
(ii) Technology Platform,
(iii) Pilot Project
(iv) Charging Infrastructure
Market creation through demand incentives was aimed at incentivizing all vehicle segments i.e. 2-Wheelers, 3-Wheelers Auto, Passenger 4-Wheeler vehicles, Light Commercial Vehicles and Buses. Under Phase I of the FAME Scheme, over 1,52,928 electric and hybrid vehicles were given direct support. Under Phase I of the same scheme, over 1.4 million litres of fuel have been saved and over 3,71,87,225 kg of reduction in Carbon Dioxide Emission. From 2015–2018 during the first phase of FAME, the central government received around 47 proposals which demanded deployment of 3,144 buses across 44 cities.
Phase II of The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles India Scheme
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme Phase II was initiated in April 2019 and is anticipated to be completed by 31st March 2022. It aims to encourage faster adoption of electric and hybrid vehicles by way of offering an upfront incentive on the purchase of Electric Vehicles (EV) and by way of establishing necessary charging infrastructure for EV. It offers incentives to manufacturers, who invest in developing electric vehicles and their components, including lithium-ion batteries and electric motors.
Emphasis on electrification of public transportation that includes shared transport. This phase aims to support, through subsidies, approximately 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2 Wheelers. In 3-Wheel (W) and 4-Wheel (W) segment incentives will be applicable mainly to vehicles used for public transport or registered for commercial purposes while in the 2-Wheel (W) segment, the focus will be on private vehicles. To encourage advanced technologies, the benefits of incentives will be extended to only those vehicles which are fitted with advanced batteries like a Lithium-Ion battery and other new technology batteries. The scheme proposes for the establishment of charging infrastructure, whereby about 2700 charging stations will be established in metros, other million-plus cities, smart cities and cities of Hilly states across the country so that there will be availability of at least one charging station in a grid of 3 km x 3 km.
The Government of India has sanctioned 670 Electric buses in the states of Maharashtra, Goa, Gujarat and Chandigarh and 241 Charging Stations in Madhya Pradesh, Tamil Nadu, Kerala, Gujarat and Port Blair under Phase-II of the FAME India Scheme.
EV Policy By Various State Governments
Andhra Pradesh EV Policy 2020
The EV policy released by the Andhra government was released on 8th December 2020. It mainly focusses on promoting innovation through grants and venture funds to research organisations, incubators and startups working on next-generation battery technology, fuel cell technologies, EV power trains, EV electronics, enabling investment in charging/battery-swapping infrastructure and hydrogen generation and fueling station development.
Andhra Pradesh plans to attract an investment of ₹30,000 crore and create 60,000 jobs in the electric vehicles (EVs) manufacturing sector, even as the state government laid out a plan to introduce 10 lakh EVs by 2024. A Centre for Advancement of Smart Mobility has also been proposed in a 100-acre site with a test track for all new EVs and autonomous vehicles. The policy aims to convert all the 11,000-odd buses of the public sector AP State Road Transport Corporation into EVs by the year 2029 and all government vehicles in the state of Andra Pradesh would be converted to EV by 2024. The state government has planned to phase out fossil fuel-based vehicles in the top four cities (Visakhapatnam, Vijayawada, Tirupati and Guntur) by 2024 and all cities by 2030.
Bihar EV Policy 2019
Bihar’s EV Policy has been still on the draft state. The vision of the Bihar Electric Vehicle Incentive Policy 2019 is to establish Bihar as the most preferred investment destination by leveraging its market strength and maximize employment opportunities in the EV sector in the state. It also envisions the creation of a manufacturing eco-system for e-vehicles in the state and fulfil Sustainable Development Goals in the transport system.
The mission of the Bihar State’s EV Policy are as follows:
(i) Supplement the GoI in its mission to bring 100% e-mobility by 2030 by doing its bit.
(ii)End manual pedalling of rickshaws in the state and upgrade them into 100% electric mobility by 2022.
(iii)Create normal/fast charging/swapping stations at every 25 Km on state highways/national highways in the state and every 3 km in the city,
(iv)Make Bodh Gaya and Rajgir 100% EV city/no emission zone,
(v)Attract on-ground investments of Rs. 1500 crore (Rs. 300 cr p.a), and
Create direct empowerment opportunities for 50,000 persons (10,000 p.a.) in the state
Karnataka EV Policy 2017
The Government of Karnataka has been aiming to establish the state as a preferred destination for investments in the EV sector. The state government formulated their EV policy in the year of 2017. Karnataka was the first state in India to have formulated the EV policy. The policy aims to generate investments worth Rs 31,000 Cr in the state for the EV Sector and to generate employment opportunities for over 55,000 people on the demand and supply side.
According to Karnataka Budget for the financial year of 2020–21, the government has announced the creation of the “ Electric Vehicles and Energy Storage Manufacturing Cluster” and a grant of Rs 10 Cr has been sanctioned for this purpose. Under the FAME India Scheme II, 300 Air-Conditioned Electric Buses are being added to the Bangalore Metropolitan Transport Corporation. With a fund of Rs 100 cr from the central government, the state government is procuring 500 new non-AC EV bus into the fleet of BMTC buses. Creation of super-fast charging points in the state. Government will identify the potential land that can be used for setting up EV charging stations and battery swapping infrastructure and would be leased for a long lease basis. The policy aims for 100% electrification of the auto-rickshaws, cabs, corporate fleet and school buses by 2030.
Kerala EV Policy 2019
Kerala’s EV Policy was released in May 2019. The vision of Kerala’s EV Policy is a follows:
Embrace electric mobility as a tool to promote shared mobility and clean transportation and ensure environmental sustainability, pollution reduction, energy efficiency and conservation, and to create an ecosystem for manufacturing EV components in Kerala
Kerala's EV Policy targets One Million electric vehicles on the road by 2022. It also aims for 200,000 EV two-wheelers, 50,000 EV three-wheelers,1000 EV goods carriers,3000 EV buses, and 100 EV ferry boats by 2020. Kerala RTC has been sanctioned 250 e-buses under FAME II for intracity operations. Kochi Private Bus Operators approached the Govt. to form ‘Kochi EBus Ltd.’ with a 26% stake from Govt. Indian Oil Corporation Ltd is currently planning to set up 24 electric charging stations across Kerala in the first phase and 12 in the second phase.
Maharashtra EV Policy 2018
The Maharashtra EV Policy was released on 6th February,2018. The vision of Maharastra EV Policy 2018, The Maharashtra EV Policy has been striving to create a manufacturing environment for EV, components, battery and charging components.
It aims to increase the number of EVs registered in Maharashtra to 5 Lakh and grab an investment of INR 25K Cr in EV manufacturing and component manufacturing, battery manufacturing/assembly enterprises and charging infrastructure equipment manufacturing in the state. The policy also offers incentives for the purchase of e-buses and buyers and end-users of private vehicles.
Madhya Pradesh EV Policy 2019
The primary objective of the Madhya Pradesh Electric Vehicle (EV) Policy 2019 is to promote sustainable electric mobility and bring about a material improvement in Madhya Pradesh air quality by bringing down emissions from the transport sector. To do so, this policy will seek to drive rapid adoption of Electric Vehicles (EVs) in a manner where they contribute to 25% of all new public transport vehicles registrations by 2026.
To enable faster adoption of electric vehicles in Madhya Pradesh by ensuring safe, reliable, accessible and affordable Charging Infrastructure eco-system and promoting the renewable energy usage in charging infrastructure. This policy will also seek to put in place measures to support the creation of jobs in driving, selling, financing, servicing, charging and manufacturing of EVs.
It further provides incentives like free parking, free road tax/registration, swappable battery to e-rickshaws, financial aid from the DUTF (Dedicated Urban Transport Fund) for electric buses.
Delhi/NCR EV Policy 2020
The policy aims at pushing rapid adoption of battery electric vehicles (BEVs) with the goal of their constituting 25% of all new vehicle registrations by 2023. The policy prioritises two-wheelers, three-wheelers, public transport (bus) and taxi fleets. Delhi plans to add 50% e-buses to public transport by 2023.
A purchase incentive of Rs 10,000 per kWh of battery capacity will be provided per electric four-wheeler (subject to a maximum incentive of Rs 1.5 lakh per vehicle) to the registered owner of the first 1000 e-cars to be registered in Delhi after issuance of the policy. The demand generation incentives offered for two-wheelers will be based on battery capacity. It will be available only for electric two-wheelers with advanced batteries. A purchase incentive of Rs 5000 per kWh of battery capacity will be provided per vehicle to the registered owner and subject to a maximum incentive of Rs 30,000 per vehicle. Light Commercial Vehicles used as goods carriers will get a purchase incentive of Rs 30,000 to the first 10,000 e-carriers to be registered in Delhi after issuance of policy in addition to interest subvention of 5 per cent on loans availed from DFC.
Telangana EV Policy 2020–30
The newly formed state of Telangana has implemented an EV policy for a period of 10 years. The vision of the EV Policy is “To make Telangana a hub for Electric Vehicles & Energy Storage Systems”.
The state of Telangana aims to attract investments worth $3 Bn and create employment for 50K people by 2022 through EVs in shared mobility, charging infrastructure development and EV manufacturing activities. It also clearly defines incentives on the demand and supply side of the EV ecosystem, draws a clear roadmap for developing charging infrastructure in the state and provides incentives related to various components of ownership cost of Electric Vehicles
Uttar Pradesh EV Policy 2019
The policy was released in the year 2019. The policy provides attractive fiscal and non-fiscal to attract investments to promote Electric mobility in the state. The policy also promotes the early adoption of EVs in the state as well as create demand in the sector.
The targets of the Uttar Pradesh EV Policy 2019 are as follows:
- To attract investments of over INR 40,000 crore in the next 5 years across the electric mobility ecosystem with an employment potential for 50,000 people
- To launch 1000 electric buses (BEVs/FCEVs), and achieve 70% EV public transportation on identified green routes in identified 10 EV cities by 2030.
- To phase out all conventional commercial fleets and logistics vehicles and achieve 50% EV mobility in Goods Transportation in identified 10 EV cities by 2024 and all cities by 2030.
- To roll out nearly 10 lakh EVs, combined across all segment of vehicles, by 2024.
- To bring in manufacturing units of high-density power storage of at least 5GWh capacity in the next 5 years for smooth electric mobility 6. To set up nearly 2 lakh slow and fast charging, swapping stations by 2024.
Uttarakhand EV Policy
The policy named ‘The Uttarakhand EV Manufacturing EV Usage Promotion and Related Services Infrastructure Policy 2018’ is set to come into effect on the date of its notification and remain in force for 5 years. The state cabinet of Uttarakhand has approved a policy to promote the adoption of electric vehicles in the state was approved in the year 2019. With this development, Uttarakhand has become the second north Indian state to lay out a plan for manufacturing and adoption of EVs after Uttar Pradesh.
Land allocated for setting up EV manufacturing or EV component manufacturing units cannot be utilized for any other purpose for 15 years from the grant. To avail incentives under this program, firms need to employ 70 per cent of their workforce from citizens residing in Uttarakhand. Term loans in the range of ₹100 million (~$1.36 million) to ₹500 million (`$6.78 million) will be provided to Micro, Small and Medium Enterprises (MSMEs) interested in manufacturing EVs. First, 100,000 customers purchasing EVs in the state will not have to pay motor vehicle tax for a period of 5 years. The first 100,000 customers purchasing commercial EVs or electric stage carriages will also be able to avail exemption from tax.
Concluding Remark
The Government of India and the state governments have been striving hard to attract a lot of investments in the EV sector. The policies have been creating an environment that could nurture the EV sector with state-sponsored funding for the investors. Clearly, the state EV policies have been aimed towards creating a lot of employment opportunities for the youth in the EV sector.
I genuinely see the EV policies implemented by the state and the central government aiming towards making the country self-reliant in the EV sector.With proper governmnental support and right investments, India can lead the world in the EV Sector.
