BW Auto World talked to Dr. Lalit Singh, CEO, Telio EV on the FAME 2 scheme and its benefits so far Indian consumers have received and how discounting this scheme can impact the future of electric vehicles in India. TelioEV is an EV charging management solutions company. Here's what he said:
What are your views on FAME 2 scheme (Faster Adoption and Manufacturing of Electric Vehicles Phase 2)?
The implementation of the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) scheme by the Indian government has boosted electric mobility in the country. The scheme offers incentives for the purchase of electric vehicles and focuses on establishing the necessary charging infrastructure for EVs. The scheme has a total budget of Rs. 10,000 crores over a period of five years and aims to support the electrification of public and shared transportation, including e-Buses, e-3 Wheelers, e-4 Wheeler Passenger Cars, and e-2 Wheelers. The demand incentive for e-2W has been increased under FAME-II to Rs. 15,000/KWh to increase the adoption of e-2W. Additionally, the Government has taken several initiatives such as reducing GST on electric vehicles and chargers, providing green license plates, and waiving road tax on EVs. The centre has also proposed to incentivize the purchase of electric buses, four-wheelers, hybrids, and three-wheelers. FAME 2 also encourages the interlinking of renewable energy and incentivizes manufacturers who invest in developing electric vehicles and their components.
How has it impacted the sale of your EVs?
The implementation of FAME India Phase II has had a positive impact on the sale of EVs in India. The scheme has incentivized the purchase of electric vehicles, which has resulted in an increase in demand for EVs. The demand incentive for e-2W has been increased under FAME-II to Rs. 15,000/KWh, which has encouraged the adoption of electric two-wheelers. The reduction of GST on electric vehicles and chargers, as well as the waiving of road tax on EVs, has also made EVs more affordable for consumers, further driving demand.
Moreover, the establishment of necessary charging infrastructure for EVs has helped alleviate range anxiety among consumers and has made EVs a more practical option. The interlinking of renewable energy has also encouraged the use of clean energy in transportation, further contributing to the growth of the EV market.
As a result of these measures, the sale of electric vehicles in India has been increasing steadily over the years. According to a report by the Society of Manufacturers of Electric Vehicles (SMEV), the sale of EVs in India increased by 20 per cent in FY 2020-21, with more than 1.52 lakh units sold compared to the previous year. The sale of e-2W, in particular, increased by 139 per cent YoY in FY 2020-21, driven by the incentives provided under FAME-II.
Overall, the implementation of FAME India Phase II has had a significant positive impact on the sale of EVs in India, and it is expected to further drive the growth of the EV market in the coming years.
As the government is planning to discontinue this scheme, what do you think how it is going to impact EV sales in the future?
The end of the FAME India Phase II scheme may affect EV sales in the future, as incentives have been a key factor driving their adoption. However, the government has introduced other initiatives, such as the PLI scheme and vehicle scrappage policy, that could incentivize the use of EVs. Additionally, some states have their own EV policies and incentives. Environmental concerns could also encourage more consumers to choose EVs, even without incentives. Therefore, while the end of FAME India Phase II may impact EV sales in the short term, it is unlikely to significantly impede the growth of the EV market in India.
What are your suggestions on improving Fame 2 so that we do not see any aggressive downfall in EV sales?
To improve FAME India Phase II and sustain the growth of the EV market in India, some suggestions include:
Increasing the budget allocation for the scheme: The current budget of Rs 10,000 crores over a period of five years may not be sufficient to achieve the desired impact on the EV market. Increasing the budget allocation could provide more incentives to manufacturers and consumers and help build more charging infrastructure.
Expanding the scope of the scheme: The scheme could be expanded to include other types of EVs, such as electric commercial vehicles, electric three-wheelers, and electric buses, to encourage the electrification of public and shared transportation.
Enhancing the charging infrastructure: While FAME II has focused on establishing the necessary charging infrastructure, more efforts could be made to ensure that charging stations are conveniently located and easily accessible for EV users.
Encouraging local manufacturing: The government could provide incentives to encourage local manufacturing of EVs and EV components, which could reduce the cost of EVs and promote the growth of the EV industry in India.
Providing more consumer awareness and education: Many consumers in India are still not aware of the benefits of EVs or are hesitant to switch from conventional vehicles. Providing more education and awareness programs could help consumers make more informed decisions and further drive demand for EVs.
Continuation of tax incentives: The government could continue to provide tax incentives such as GST reduction and waiving of road tax on EVs to make them more affordable for consumers.
By implementing these suggestions, the Indian government can further promote the adoption of electric vehicles in the country and sustain the growth of the EV market, even after the end of the FAME India Phase II scheme.