Govt to invest Rs 14k cr to develop EV market by 2020

The National Council for Electric Mobility (NCEM) on Wednesday approved the National Electric Mobility Mission Plan (NEMMP) 2020, in accordance with which the government would invest up to Rs 14,000 crore to create infrastructure and promote the use of environment friendly electric vehicles in the country.

According to a study commissioned by the Ministry of Heavy Industries and Public Enterprises, in collaboration with industry stakeholders, India has the potential to record sales of six to seven million electric cars and two-wheelers by 2020.

An investment of Rs 20,000-23,000 crore is required to develop a market, as well as infrastructure, for electric and hybrid vehicles over the next eight years. While the government would provide about 60 per cent of the resources (Rs 12,250-13,850 crore), the industry would have to invest in developing products and creating a manufacturing ecosystem.

“The substantial savings on account of a decrease in liquid fossil fuel consumption, owing to a shift to electric mobility, would more than offset the support, justifying this initiative as an economically viable proposition,” read an NCEM statement. The resultant benefits from fossil fuel savings are projected at 2-2.5 million tonnes in 2020. Carbon dioxide emissions are also projected to rise up to 1.5 per cent by the end of the Plan period.

Of late, countries have been increasing investment in environment-friendly vehicles. While France aims to invest about $400 million to bring on road two million battery electric vehicles and plug-in hybrid electric vehicles, Japan has plans to invest $250 million for two million electric vehicles by 2025.

“Our study shows there are four focus areas---demand generation, research and development works, infrastructure creation and provision of subsidies ---to support sales of electric vehicles. The policy has been approved today. Over the next few months, individual schemes will be etched out for implementation and targets for 2020,” said Naveen Munjal, president, Society of Manufacturers of Electric Vehicles.

In India, auto majors such as Maruti Suzuki, Mahindra & Mahindra and Tata Motors have announced plans to introduce electric-powered vehicles, provided the government announced a policy to promote such cars.

Pawan Goenka, president (automotive and farm equipment sectors), Mahindra & Mahindra, said, “The private sector not only has to invest in developing products, but also in increasing localisation levels to make such vehicles affordable. As volumes rise, subsidies would automatically fall in time.” According to a study by Booz-Allen last year, the industry has to invest up to Rs 45,000 crore by 2020 to set up manufacturing capacities for hybrid and electric vehicles.

The NCEM meeting chaired by Minister for Heavy Industry and Public Enterprises Praful Patel was attended by Minister for Urban Development Kamal Nath, Minister for New and Renewable Energy Farooq Abdullah, Minister for Road Transport and Highways C P Joshi, Minister for Science and Technology Vayalar Ravi, Minister of State for Finance Namo Narain Meena, Planning Commission member K Kasturirangan and R Chidambaram, principal scientific advisor to the prime minister.