Parliamentary panel urges govt to frame a comprehensive national EV policy, extend FAME-II incentives by 2 years

A Parliamentary panel on electric vehicles (EVs) on Friday has urged the government to frame a comprehensive national policy on electric vehicles incorporating the State-level and international best practices.

It has also urged for extension of FAME-II scheme beyond March 31, 2024, by an additional two years to allow more time to evaluate the effectiveness of the scheme.

The Committee on Estimates chaired by MP Girish Bhalchandra Bapat said the policy should incorporate best practices in charging infrastructure, battery swapping, battery waste management/recycling, and public awareness in addition to the demand and supply side incentives such as lower GST, waiving road tax, registration fee, the hire-purchase scheme at discounted interest rates by financial institutions, and should serve as a guiding policy to all States/ UTs and ensure a comprehensive and uniform growth of the EV sector.

Also read

Motovolt acquires stakes worth €1 mn in German electric 2-wheeler OEM eROCKIT AG

‘Continue support’

On extension of FAME-II scheme, the Committee said, “Removal of government support would result in price escalation of EVs significantly. The Committee finds that a large number of start-ups are also involved in this field, which may have to shut down once the FAME-II is closed.”

The additional two years would allow more time to evaluate the effectiveness of the scheme and to make necessary adjustments/ modifications to promote the EVs, it said.

The Committee further recommended that a comprehensive FAME-III scheme should be introduced once the extended period of FAME-II is over, based on the experience gained from FAME-I and FAME-II to continue the EV penetration in the market to such a level that it can compete with internal combustion engine (ICE) vehicles, especially in terms of upfront costs, without requiring high incentives.

Adapting more technology

On promotion of technologies other than EVs such as flex fuel, Hydrogen, the Committee suggested that along with EVs and hybrid vehicles the government should also promote other technology such as flex fuel vehicles, Hydrogen ICE and Hydrogen fuel cell vehicles with greater emphasis for mobility transition.

“The Committee also recommended that a roadmap for setting up of solar charging stations should be prepared in a time bound manner to reduce the dependence on electricity generated by using coal, to remain true to the green mobility objective of the government,” it said.

On production linked incentive (PLI), the Committee said that for the benefit of domestic economy, the beneficiaries of the scheme need to continue their production, even after the conclusion of the scheme. The Committee, therefore, have recommended that the government should make such a provision applicable to the beneficiaries of the scheme to make it mandatory for them to continue their production till 2030 at least.

PLI for automobile and auto component scheme provides incentives to overcome disabilities in respect of manufacturing of advanced automotive technology with a budgetary outlay of ₹25,938 crore, spread over a period of five years from 2022-2023 to 2026-27.