Recent changes in FAME II scheme to boost demand for e-vehicles: FICCI

Industry chamber FICCI on Monday said the recent changes in the FAME II scheme, including enhanced subsidies for electric two-wheelers, are expected to accelerate demand for electric vehicles in the two-wheelers, three-wheelers and bus segments.

Yet, the chamber asked the government to also raise the demand incentive on electric three-wheelers like it has done for e-two-wheelers.

Earlier this month, the Department of Heavy Industry (DHI) had increased the demand incentive for electric two-wheelers to Rs 15,000 per KWh as compared to Rs 10,000 per KWH earlier, while capping incentives at 40 per cent of the cost of vehicles as against 20 per cent earlier.

Also, Energy Efficiency Services Ltd (EESL), a Government of India procuring body, will aggregate demand for 3 lakh electric three-wheelers for multiple user segments.

For e-busses, EESL will go for aggregation of demand in Mumbai, Delhi, Bengaluru, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, and Pune on OPEX (operational expenditure) basis and the details are to be worked out.

Commenting on the steps by the government, FICCI EV Committee Chair Sulajja Firodia Motwani said, "It is a great move from the government to revise upwards the demand incentive of electric two-wheelers from Rs 10,000 per KWh to Rs 15,000 per KWh, which FICCI also has been recommending in the past."

Motwani, who is also founder and CEO, Kinetic Green Energy & Power Solutions Ltd, further said, "These measures will help reduce the cost of ownership difference between ICE engine vehicle and EV in the two-wheeler segment and encourage consumers to adopt electric two wheelers."

She said FICCI also welcomes the initiative to aggregate demand for buses and electric three-wheelers (E3W), which will benefit the E3W designed for cargo solutions and the industry is looking forward to working with EESL, DHI and NITI Aayog to make this vision a great success.

"At the same time, we request the policy makers to revise upwards the demand incentive slab for electric 3-wheelers from Rs 10,000 per KWh to Rs 15,000 per KWh as well. This will help create demand for E3W for passenger movement which will greatly help in creating self-employment and reduce pollution in our cities," Motwani said.

FICCI said the aggregation of orders/demand of E3W through EESL at national scale will bring down cost and eventually increase demand too.

"The notification also mentions that for electric buses, EESL will go for aggregation of demand in these 9 cities for remaining e-buses under the Scheme on OPEX basis. With this amendment the EV Bus segment can create the impact in the world as it did for 4-wheeler electric vehicles in the past," it added.