Charging Ahead: The Impact of India's EV Policies on Manufacturing and Adoption Strategies

The article discusses various policies and initiatives taken by the Indian government to promote electric vehicle adoption in the country. Key points include the launch of the FAME India scheme in 2015 to boost EV adoption, the PLI scheme in 2021 to incentivize domestic auto component manufacturing, and the National Programme on Advanced Chemistry Cell Battery Storage in 2021. It also discusses various EV policies of different Indian states providing incentives for manufacturing, adoption, and charging infrastructure development. Major companies like Ola Electric, Greaves Cotton, etc. are working to establish EV manufacturing facilities and retail networks in India.

FAME India Scheme was introduced in 2015 to bring up the level of adoption of electric vehicles and address issues like emissions from vehicles. The scheme now is fully operational with the implementation of its Phase II having a total outlay of INR 10,000 ($ 1.2 Bn) for a period of 5 years from the commencement date of April 1, 2019. The share of total budgetary assistance that is earmarked to create demand for electric vehicles in the country is 86%. Accordingly, 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars (including Strong Hybrid), and 10 lakh e2 Wheelers will be supported by this provision.

Under this scheme, the Production Linked Incentive (PLI) Scheme for the Automotive Sector, which was launched in September 2021 with a fiscal outlay of INR 25,938 Cr ($ 3.1 Bn) is to be used for supporting the domestic manufacturing of advanced automotive technology (AAT) products and attracting investments in the automotive manufacturing value chain. The SOP details that the scheme has two parts: UNITED OEM will produce electric vehicles or those with hydrogen engines, while COMMON CHAMPIONS will manufacture parts that are innovative and high-tech. Under the plan, proposals totaling INR 74,850 Cr ($ 9 Bn) have been received against the target investment of INR 42,500 Cr ($ 5.1 Bn) over five years.

PLI Scheme under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage was launched in the year 2021 to help in building manufacturing capabilities of India in ACC manufacturing with an outlay of INR 18,100 Cr ($ 2.1 Bn) for seven years (including two years of the gestation period). This remuneration shall be paid in installments of one year at a stretch conditional upon the production of batteries sold in India during such period. Thus, up to now, 3 firms have been chosen with 30 GWh of capacity.

Additionally, the government has taken the following measures to provide impetus to green mobility further:

• The 2023-24 Union Budget exempted the customs duty on the import of capital goods and machines needed for the manufacturing of lithium-ion cells which are used in batteries for electric vehicles.

• A GST rate applicable to electric vehicles stands at 5% as opposed to 12%; GST on chargers or charging stations for electric vehicles is reduced from 18% to 5%.

• Both the commercial vehicles that run on battery and the private ones are accorded the green license plates. They are also not exempted from permit requirements. Road tax exemption for EVs temporarily, which in the long run will help bring down the initial purchase price of EVs.

• The creation of Public Electric Vehicles Charging Infrastructure on a national had become the aim of the Ministry of Power, which came up with the revised Guidelines and Standards on the said subject. The guidelines expect private players to install charging stations for EV systems. Consequently, the Oil Marketing Companies have made a move aiming to install 22,000 EV charging stations in popular cities and on the major highways in the country.

On 14th March 2024, the Indian Government issued an electric vehicles (EV) policy, suggesting a minimum of Rs 4,150 crore or about $500m for infrastructure development. The multiyear incentives offered are to enable investors to establish EV manufacturing sites within 3 years and DVA of 25% in the 3rd year and 50% in the 5th year.

In an attempt to attract EV manufacturers into India particularly, Tesla, a US-based EV Market that can also enter the emerging EV market of the country on the 14th of March 2024, the government introduced a new EV policy that includes incentives for them. The gazette notification by the Centre mentions that the importers of up to 8.000 EVs if priced around $35,000 or above, may have a simple duty charge of 15% which was 70% earlier. This would apply only if the importers commit to having an investment of at least $500 million in India within the next three On the other hand, native OEMs Tata Motors & Mahindra & Mahindra demanded the price corner of the market CUV above $ 35,000 from the government in favor of the protection of their investments and competitiveness levels. Tesla's efforts of lowering the duty on the new $25,000 EV that it plans to introduce to markets like India will most likely be replaced with its Model 3, which is currently sold globally at close to $40,000 in the international market. Therefore, the company will concentrate on making its procedures locally to start its India market entry plans. However, the persons mentioned above added that it is on The step is merely believed to be a deft performance by the government on the birth of the model code of conduct day before the upcoming general election, where India is being positioned as a business-welcoming destination but also being managed not to hurt the domestic industry. The government will also seek bank guarantees equalling the reduction in import duty on the vehicles from the carmakers, and will only return them if they meet all the criteria laid down under the scheme in five years.

In the midst of June 2022, Haryana also approved its EV policy in line with other states. The policy enables the State to establish itself as a reliable EV manufacturing hub and in the same breath to develop the supporting ecosystem by providing charging infrastructure, skill development, and R&D in EV technology. The government of Haryana state has made 2022 as “Year of Electric Vehicles” declaration.

In the month of April 2022, one of the dense energy batteries in the world at 54MWh, was developed by a battery startup in Bengaluru followed by its acquisition by a European renewable energy company, Eren Groupe, it’s used for storage is also a major factor. This hefty density ensures that more power is produced per atom, which is an economical choice compared to other batteries like sodium-ion and aluminum air. The battery's charges, by the manufacturer, take 30 minutes to charge fully. This new acquisition by a European company will not only contribute to domestic manufacturing but also to the development of strategies that make more EVs affordable, mainly because batteries which are the most expensive component of the car may account for up to 40 percent of the total price.

In November 2021, India rolled out the website e-AMRIT – https://www.e-amrit.niti.gov.in/ – at the COP26 Summit in Glasgow, this one-stop solution for all information on electric vehicles is provided. It addresses these concerns that EVs may have when one thinks about the adoption of this technology. Such issues include the positioning of charging facilities and the options for financing EVs. Plus, also addresses information about investment, policies of the government, and available subsidies for the drivers and manufacturers.

The federal government is also making significant efforts toward the transition to green mobility, and the recent modifications to the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) II scheme to make electric two-wheelers affordable is a notable mention. During the second phase of the FAME scheme, the e-vehicles were supported through demand incentives to the amount of about INR 18.69 billion and the total number is about 469,315 as of July 11, 2022. Granted permissions of 6315 electrical buses and 2877 EV charging stations sanctioned in 68 cities across 25 states/UTs are the most. As a result, there are 50 OEMs, of which there are those that are start-ups and established manufacturers among them. These companies have registered and revalidated about 106 of their electric vehicle models. There are 1,576 charging stations designated for setting up along the highways and expressways in 9 and 16 routes, respectively.

Moreover, by integrating production-linked incentive schemes, aims to establish a local production system will be also supported by targets of increased adoption of electric mobility. This is intended to be realized by rewarding new investments into the creation of local supply chains that are domestically focused on critical technologies, products, and components.

By September 2021, Greaves Cotton has unveiled his entry into multi-brand retail of electric vehicles under the brand name AutoEVMart. This is reportedly the best way a platform can be made to enable the consumer to own an electric vehicle from Ampere Electric to the many others in the EV space. Hence, AutoEVMart will be a one-stop shop for electric vehicle needs in India, providing e-scooters, e-rickshaws, and other EVs as well as EV accessories. The Greaves group is planning to establish the first store of its kind merchandising the new technology in Bengaluru.

In September 2021, the State of Assam declared the Electric Vehicle Policy, 2021 and, slated the target for phasing out fuel-based vehicles by 2030. The Assam government has got to begin by changing all the vehicles it has for government use and the public transport buses to the EVs replacement. This objective is to place 200,000 electric vehicles on the road within the next five years. The Industries, Commerce, and Public Enterprises Department of Assam has reported that the new EV Policy offers people the opportunity to make the switch from ICVs to EVs, through different incentive options. The government of Assam also has the NEIDP scheme (2017) and IIP Assam (2019) that provide incentives for EV manufacturing in the state.

SwPL, an Indian leading EPC firm has formally commenced its activities in the electric vehicle (EV) segment in India. It has entered into a 50-50 joint venture with Enel X, a company that was created on Apr 1, 2021, to populate the Indian market with innovative charging infrastructure.

The journey of Indian start-ups towards a sustainable future is not limited to the mobility segment. In March 2021, Ola Electric, the subsidiary of the unicorn Indian ride-hailing start-up, also announced that they would be building the world’s largest electric scooter plant in Hosur (which is a two and half-hour drive from Bengaluru) over the next twelve weeks ola electric plans to increase its production capacity to 10 million by 2022 that is 15% of the total number of electric scooters to be produced in the world.

Conclusion: In conclusion, the Indian government has implemented various policies and initiatives to promote electric vehicle adoption in the country, such as the FAME India scheme, PLI schemes, and state-specific EV policies. Major companies are also investing in EV manufacturing facilities and retail networks in India, signaling a significant shift towards green mobility in the country.

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