The Confederation of Indian Industry (CII) has backed the Centre’s revised Faster Adoption and Manufacturing of Hybrid and Electric Vehicles or FAME-II scheme. The industry body’s support for the ₹10,000-crore scheme comes despite multiple electric two-wheeler and personal mobility manufacturers red-flagging provisions in the scheme.
“The main aim of the scheme is to encourage faster adoption of electric and hybrid vehicle by way of offering upfront incentives on purchase of electric vehicles and by way of establishing a necessary charging infrastructure. The scheme will not only help in addressing the issue of rising environmental pollution in cities but will also help in India’s fuel security,” a CII statement said.
But sector experts note that more than 95 per cent of the electric two-wheeler models being produced now won’t be eligible for incentives under the new scheme announced by the Ministry of Heavy Industry and Public Enterprise. According to Crisil Research, the electric two-wheeler segment will be the most impacted by the new rules as manufacturers may need to scramble to conform with stringent FAME-II, unless the government helps out by diluting the norms.
India has a vision that by 2030, there will be100 per cent electrification of three-wheelers, commercially used four-wheelers as well as vehicles used in public transport. Another aim is for 40 per cent electrification in private two- and four-wheelers by then.
According to the Society of Manufacturers of Electric Vehicle (SMEV), rules in the FAME-II scheme mandate that only companies that produce 50 per cent localised vehicles can avail the incentives. “This makes almost impossible for any manufacturer to avail the scheme as Indian component suppliers are not yet ready to manufacture components for the current low volume of EV,” the SMEV has alleged.
CII too notes that FAME alone is not the way ahead for increasing the reach of electric vehicles. “However, with EV penetration in India currently at just 1 per cent, FAME alone is not enough to reach the 2030 target,” CII said.