The electric vehicle sector in the country is set to get a policy boost with the government likely to fast-track three big-ticket schemes supporting adoption and manufacturing of electric vehicles, local production of advanced technology batteries and faster procurement of electric buses by public transport networks during the first hundred days in office.
Top sources in the know told ET, the schemes being considered for approval include award of 10 GWh capacity under the PLI ACC (Production Linked Incentive Scheme for Advanced Chemistry Cells) to set up local units for making advanced batteries, a payment security mechanism for extending interest-free capital to automakers in case of default in payments by state-transport undertakings which will help facilitate widespread procurement and deployment of electric buses and the third chapter of the Faster Adoption and Manufacturing of Electric Vehicles (FAME 3).
All three schemes have been put up for inclusion in the 100-day agenda to accelerate the transition towards clean mobility solution to realise net zero objectives, a senior official aware of the development said, adding, the Prime Minister is scheduled to chair a meeting of secretaries from across ministries later this month to freeze the 100-day plan.
The centre has received seven bids for re-awarding 10 GWh capacity under PLI ACC with a budgetary outlay of INR 3,620 crore. “The tender will be awarded shortly. Local manufacturing of advanced batteries is critical and will help bring down costs of electric vehicles”, the official informed. As many as 18 players including Reliance Industries and JSW Neo Energies had participated in the pre-bid consultation held in February.
On the demand side, a third edition of the flagship incentive scheme FAME – with an outlay in the range of INR 10,000 crore – is likely to be announced in the upcoming budget to incentivise buyers of two-wheelers, three-wheelers and electric buses to transition to electric. However, unlike the previous iterations of the scheme, FAME 3 will be valid for a shorter duration of two years.
The official added, “Bringing on road more electric buses is a priority. The government incentivised purchase of 7,000 electric buses under FAME 2. The new scheme will increase the number of electric buses subsidised for purchase.”
Additionally, to accelerate the shift of public transport networks to electric discussions are underway to expand the scale of payment security mechanisms to offset risks of bus makers. India has partnered with the United States to set up a fund of USD 390 million to deploy 10,000 e-buses in the country. Mid-term, the centre is looking at a payment security fund of USD 10 billion in non-recourse lending to e-bus makers to deploy 38,000 buses in India. Replacing diesel buses with electric ones is a priority for the government as it can have the highest impact, both socially and environmentally.
