India Electric Mobility Council Urges Government to Continue EV Sector Incentives, Warns Impact on Sales
India Electric Mobility Council Urges Government to Continue EV Sector Incentives, Warns Impact on Sales

Industry body IEMC on Thursday called for continued incentives for the electric vehicle industry, warning that the removal of standards measures would reduce electric vehicle sales from an estimated 125 million to 37 million in 2030.

The Indian Energy Storage Alliance (IESA) expects electric vehicle (EV) sales in India to drop to 37 million units by 2030 from a projected 125 million units if demand incentives are removed, according to the Indian Electric Vehicle Council (IEMC).

The central government launched the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme in 2015, under which subsidies are provided to EV manufacturers and the benefits are passed on to buyers. The second phase of the FAME II program was launched in 2019.

The scheme, which also provides incentives for setting up battery charging stations in the country, is expected to end next March.

In a statement, the IEMC said: “…to ensure continued growth in EV adoption in India, more than 80 EV companies gathered in New Delhi to propose a comprehensive review of demand and supply drivers affecting the EV industry post FAME II. reconsider.”

IEMC also expressed concern over the government’s move to reduce subsidies for electric two-wheelers under FAME II. 15,000 rupees per kWh for 10,000 units and said sales of electric two-wheelers fell by more than 50% as a result.

The electric vehicle industry sold 1,05,299 electric two-wheelers in May and only 46,003 two-wheelers in the following month, the report said.

Sales improved slightly in July to 54,176 vehicles, but were still about half of the industry’s sales in May, the report noted.

“These figures show the EV industry’s reliance on on-demand subsidies. Subsidies have been a key enabler of the EV ecosystem,” it said.

According to IESA’s analysis, India’s electric vehicle industry is expected to grow at a compound average growth rate of 49% by 2030 with strong government support.

In a best-case scenario with demand-side incentives, such as the FAME scheme, EV sales are expected to be 125 million units in 2030, while in a worst-case scenario without demand incentives, sales could drop to 37 million vehicles.

Industry stakeholders also recommend that the commercial truck and fleet mobility segment be taken into consideration, taking into account the distance traveled by these categories, the volume of goods transported, and the potential fuel savings and CO2 emissions.

Sectors such as construction equipment and tractors also need to be taken into consideration to spark industry interest and encourage leading players to develop ‘Make in India’ solutions for this high-potential segment, they said.

Rahul Walawalkar, President of IESA and Chairman of IEMC, said: “What is needed now is to fully consider all the demand and supply related drivers of the growth of the electric vehicle market in India. A similar overall strategy to decarbonize the transport sector.” Much needs to be done beyond subsidies or incentives. He added that the purpose of the forum was to gather input from across the industry and present it to the appropriate government agencies in a well-structured manner.

NITI Aayog Consultant (Infrastructure Connectivity-Transportation and Electric Vehicles) Sudhendu J Sinha also asked stakeholders to think disruptively, think about new market segments and other drivers, and provide advice to help deliver end-to-end solutions .

IEMC membership includes players from automotive manufacturing, components, R&D, charging, battery replacement, testing and safety standards.

Earlier this month, IEMC organized industry dialogues among policy makers and stakeholders covering electric two-wheelers (e2W), e3W, e4W, electric buses, trucks, farm needs, construction equipment, EV charging and battery replacement industry players.

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(This story was not edited by NDTV staff and was automatically generated from syndicated feeds.)

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