Explained: Government initiatives to boost electric car adoption in India

Imagine a world where people breathe in clear air, there are quieter roads and a lesser dependency on fossil fuels. Electric cars have the potential to achieve this vision and the Indian government is taking proactive measures to make them a reality on our roads. Various measures have been taken by the Central Government to boost domestic manufacturing of electric vehicles, reducing the country's dependence on imports. Let’s explore the government initiatives to boost electric car adoption in India.

PLI Scheme

The Indian government’s latest move can benefit all automobile and auto components industry stakeholders. The Production Linked Incentive (PLI) Scheme has been approved, paving the way for a brighter future for the industry. This scheme aims to enhance the manufacturing of Advanced Automotive Technology products within the country and attract investments in the automotive manufacturing value chain. The scheme will disburse Rs. 25,938 crores over 5 years.

The Indian Government approved a PLI scheme on May 12, 2021, to manufacture Advanced Chemistry Cells (ACC) in the country, aiming to reduce the prices of batteries.

FAME India Scheme Phase II

The Indian government has introduced the Phased Manufacturing Programme (PMP) under the FAME India Scheme Phase II. The main objective of the PMP is to promote domestic manufacturing of electric vehicles, their assemblies, sub-assemblies, parts and sub-parts. This is aimed at increasing the domestic value addition.

Additionally, the government has taken various steps to encourage the adoption of electric vehicles in the country.

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As part of Phase II of the FAME India Scheme, incentives are provided to buyers of electric vehicles. These incentives come in the form of an upfront reduction in the purchase price of electric vehicles. The amount of incentive is determined by the battery capacity of the vehicle.

• For e-2Ws, the incentive is Rs. 10,000/KWh, which covers 15% of the total cost of the vehicle.
• For e-3Ws, the incentive is Rs. 10,000/KWh, with a cap of 20% of the total cost of the vehicle.

GST on electric vehicles

The government has cut the GST on electric vehicles from 12% to 5%, while for chargers and charging stations, it has been reduced from 18% to 5%.

Green license plate

Ministry of Road Transport and Highways (MoRTH) announced that battery-operated vehicles will be given green license plates and exempted from permit requirements.

Road tax waiver

MoRTH has issued a notification asking states to waive road tax on EVs, which will help reduce the initial cost of EVs.

Regular assessments

The Ministry of Heavy Industries conducts regular assessments of electric two-wheelers and three-wheelers, including evaluating existing infrastructure, charging networks, and manufacturing capabilities.

EV charging infrastructure

According to the Ministry of Power, the lack of public EV charging infrastructure is one of the major obstacles to the widespread adoption of electric vehicles in the country. To overcome this barrier and promote faster adoption of electric vehicles, the Ministry of Power has issued guidelines and standards for public EV charging infrastructure.

Benefits of the EV charging infrastructure guidelines

• To promote the creation of EV charging infrastructure and provide affordable tariffs for public EV charging station operators and EV users.
• Electric Vehicle owners can use existing electricity connections for charging at home or office.
• Introducing a revenue-sharing model to offer land at promotional rates for the installation of public charging stations.
• Ensuring timely electricity connection to Public Charging Stations (PCS).
• Public and Battery Charging Stations shall have a single-part EV tariff. The tariff shall not exceed the Average Cost of Supply (ACoS) until March 31, 2025.
• The government has set limits on how much public EV charge point operators can charge EV customers to recover the cost of servicing the capital investments made in setting up the PCS. The amendment sets a limit of Rs. 2.50 per unit and Rs. 3.50 per unit for the electricity used in the slow AC charging of Electric Vehicles (EVs) at Power Charging Stations (PCS) during solar hours (9 am to 4 pm) and non-solar hours (rest of the day), respectively. Additionally, a ceiling limit of Rs. 10 per unit and Rs. 12 per unit of electricity for DC Fast charging of EVs has been set at PCS during solar and non-solar hours, respectively.
• The DISCOMs will install public EV charging stations at 0.8 times ACoS during solar hours and 1.2 times ACoS during non-solar hours.

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