Rs 500 cr electric-mobility scheme shows govt’s continued thrust on EV: Experts, ET EnergyWorld

New Delhi: The Rs 500 crore Electric Mobility Promotion Scheme 2024 shows the government’s continued thrust on vehicle electrification as it is indispensable on a long-term basis to fortify the case for an EV ecosystem, industry experts said on Thursday. Ministry of Heavy Industries has announced the new scheme to promote e-mobility in the country with an outlay of Rs 500 crore for four months beginning April 2024. The new scheme is for 2-wheelers and 3-wheelers.

Commenting on the government’s decision, Srikumar Krishnamurthy, Senior Vice President and Co-Group Head – Corporate Ratings, ICRA said the scheme is a favourable move towards the acceleration of the electrification pace in the country.

“The EMP scheme reflects the government’s continued thrust on vehicle electrification, although the quantum of subsidy is seen lower in line with expectations,” he said.

ICRA expects the penetration levels of e-2w and e-3w (excluding e-rickshaws) to reach 6-8 per cent and 14-16 per cent, respectively in fiscal 2024-25, he added.

Ayush Lohia, CEO, Lohia opined that the scheme offers a significant opportunity to expand the market and contribute to the growth of the electric vehicle industry.

“With subsidies of up to Rs 25,000 for small three-wheelers and Rs 50,000 for large ones, the scheme is expected to drive increased demand for three- wheelers and two-wheelers,” he said.

Lohia manufactures over 12 types of vehicles, ranging from electric rickshaws to auto rickshaws designed for both passenger and goods transportation.

The scheme aims to support 3,72,215 EVs including e-2W (3,33,387) and e-3W (38,828 including 13,590 rickshaws and e-carts and 25,238 e-3W in L5 category).

To encourage advanced technologies, benefits of incentives will be extended to only those vehicles which are fitted with advanced battery.

Commenting on the scheme, Hyder Khan, CEO of Godawari Electric Motors said the announcement clears the uncertainty which was plaguing the industry for the past few months as the FAME scheme was about to end this month.

“The new scheme though puts focus on EV two-wheelers and three-wheelers, it could have given more clarity on the recertification of products as the process takes time. However, it’s imperative to acknowledge that the government support is indispensable on a long-term basis to fortify the case for EV ecosystem,” Khan said.

Godawari Electric Motors is a Chhattisgarh-headquartered EV manufacturer and retailer of three-wheelers and two-wheelers (ranging from e-scooter, e-cycle, e-auto, e-loader).

The second phase of FAME-II or Faster Adoption and Manufacturing of Electric Vehicles in India programme ends on March 31, 2024.

H S Bhatia, Managing Director of Kelwon Electronics and Appliances Pvt Ltd, manufacturing partner of Daewoo India, said the allocation of Rs 500 crore for four months shows a serious commitment to promoting sustainable transportation.

“The incentives offered, like subsidies for small and large three-wheelers, will surely drive consumers towards electric mobility. This move not only benefits the environment but also supports the growth of the EV industry,” he said.

The heavy industries ministry said the scheme promotes an efficient, competitive and resilient EV manufacturing industry in the country thereby promoting the vision of Aatmanirbhar Bharat.

  • Published On Mar 15, 2024 at 10:24 AM IST

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