60-70% of Indian govt e-mobility fund to incentivise EV buyers

Buyers of electric vehicles will be the biggest beneficiaries of the government's Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme that was announced in the Union Budget on Saturday.

The second biggest beneficiary will be technology and component providers for electric vehicles (EVs). This is aimed to help Indian companies localise products, which will in turn help reduce cost of EVs. The new scheme will kick in on April 1, 2015.

In an exclusive interview with Autocar Professional, Ambuj Sharma, additional secretary, Ministry of Heavy Industries and Public Enterprises, government of India, said, "About 60-70 percent share will go for incentives. About 20-25 percent share will go for a technology road map because you want to indigenise and localise a number of electric drivetrain parts which are presently being imported. Even battery management systems are very strong in IT but we do not have adequate local capacity at present. And then, pilot projects and charging infrastructure will take about 10 percent each." 

The National Electric Mobility Mission Plan 2020 (NEMMP), which was announced in January 2013, envisaged an investment of Rs 13,000-14,000 crore towards helping India 'to emerge as a leader in the xEV two-wheeler and four-wheeler market in the world, with total xEV sales of 6-7 million units'. Though the developments on ground are far behind schedule, the release of the first tranche of funds is a significant boon to EV makers and suppliers who were struggling financially due to lack of government support.Though the government has earmarked only Rs 75 crore in the Budget 2015-16 to promote electric mobility, more funds will be released after the first instalment is exhausted. By that time the fiscal health of the economy is expected to be better than it is now. Overall, the investment to be made by the government till 2017 is Rs 1,000 crore. "Rs 800 crore is from the planned fund for the 12^th plan, which is undergoing now, till the period 2017. Over and above that, there is an automotive cess fund. So under that we will be getting about Rs 200 crore over the period of the next two years. So adding both will come to Rs 1,000 crore, if not more," Sharma told Autocar Professional.

Read exclusive interview with Ambuj Sharma, additional secretary, Ministry of Heavy Industries and Public Enterprises, government of India