Lok Sabha Question No. 398 (STARRED), answered on 2021-03-23
Subject: Promotion of Electric Vehicles
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: Sangamlal Kadedin Gupta, Chandra Prakash Joshi

## GOVERNMENT OF INDIA

## MINISTRY OF HEAVY INDUSTRIES & PUBLIC ENTERPRISES DEPARTMENT OF HEAVY INDUSTRY

## LOK SABHA STARRED QUESTION NO. 398

ANSWERED ON 23.03.2021

## PROMOTION OF ELECTRIC VEHICLES

## 398. SHRI SANGAM LAL GUPTA: SHRI CHANDRA PRAKASH JOSHI:

Will  the  Minister  of  HEAVY  INDUSTRIES  AND  PUBLIC  ENTERPRISES भारी उद्योग एवं ऱोक उद्यम मंत्री be pleased to state:

- (a) whether the Government has taken/proposes to take steps to promote manufacturing and usage of Electric and battery eco friendly vehicles in the country  and if so, the details thereof;
- (b) whether any time limit has been or proposed to be fixed for converting all the vehicles in the country into electric and battery eco friendly vehicles and if so, the details thereof;
- (c) whether  the  Government  offices  were  directed  to  take  action  in  this  regard  during 2018- 2020;
- (d) if so, the details thereof along with the number of vehicles for use in such Government offices which have been replaced during the said period; and
- (e) whether  there  is  any  proposal  to  provide  incentives  to  the  common  people  for purchasing electric or battery operated vehicles so as to check pollution in the cities and if so, the details thereof?

## ANSWER

## THE MINISTER OF HEAVY INDUSTRIES & PUBLIC ENTERPRISES (SHRI PRAKASH JAVADEKAR)

(a): Yes, Sir. Department of Heavy Industry (DHI) has formulated a scheme namely Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme in 2015 to promote adoption and manufacturing of electric/hybrid vehicles (xEVs) in India. Phase-II of FAME India Scheme is being implemented w.e.f. 01 st April, 2019 for a period of 3  years  with  a  total  budgetary  support  of  Rs.  10,000  crores.    This  phase  focusses  on supporting  electrification  of  public  &  shared  transportation  and  aims  to  support,  through subsidies, 7090 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2  Wheelers.    In  addition,  creation  of  charging  infrastructure  is  also  supported  to  address range anxiety among users of electric vehicles.  The details of the scheme as notified is at ANNEXURE-I.

(b): No, Sir.

(c) & (d): Ministries/ Departments and their attached offices, located in Delhi are encouraged to switch over to electrical mobility.  Energy Efficiency Services Limited (EESL) under the Ministry  of  Power  have  completed  the  procurement  process  of  10,250  electric  cars,  out  of which 1,131 e-cars have been deployed at pan India level to various government departments, Ministries at Central and State level, PSUs, shared mobility operators etc.  These e-cars are being given on lease/ outright purchase basis to replace the existing petrol and diesel vehicles taken on lease earlier.

(e): Yes,  Sir.    Under  FAME-India  Scheme  Phase-II,  incentives  are  being  provided  to purchasers of electric vehicles in  the form  of  an  upfront  reduction  in  the  purchase  price  of Electric Vehicles used for public transport or those registered for commercial purposes for e2W, e-3W and e-4W.  Further, privately owned registered  e-2W is also covered under the scheme.  The demand incentive provided to the purchasers of these electric vehicles is linked to the battery capacity. An incentive of Rs. 10,000/KWH is given subject to capping at 20% of the cost of these vehicles.

*****

## MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES

## (Department of Heavy Industry)

## NOTIFICATION

New Delhi, the 8th March 2019

S.O. 1300(E) .-Scheme for Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II).

## Background:

1. Department  of  Heavy  Industry  had  launched  a  scheme,  namely  Faster  Adoption  and  Manufacturing  of (Hybrid &) Electric Vehicles in India (FAME India), for promotion of electric and hybrid vehicles with an outlay of Rs.795 Crore vide S.O. 830 (E) dated 13 th March 2015.
2. Phase I of the FAME India Scheme was initially approved for a period of 2 years, commencing from 1st April 2015. The scheme has been extended from time to time, with the present extension being up to 31st March 2019 and with an enhancement in outlay from Rs. 795 Crore to Rs. 895 Crore.
3. Para 11 of the Notification of Phase-I of FAME Scheme provides for review of Phase-I based on outcome and experience gained during this phase as well as with inputs from stakeholders for implementation with appropriate allocation of funds in the future.
4. Accordingly, after review of the phase I, Department of Heavy Industry formulated the Scheme for Faster Adoption  and  Manufacturing  of  Electric  Vehicles  in  India  Phase  II  (FAME  India  Phase  II)  with  the approval of Union Cabinet as per the scheme parameters given in subsequent paragraphs.

## Scheme Parameters: General:

5. The  scheme  is  proposed  to  be  implemented  over  a  period  of  3  years,  w.e.f  1st  April  2019,  for  faster adoption of electric mobility and development of its manufacturing eco-system in the country.
6. An Inter-Ministerial Empowered Committee -Project Implementation and Sanctioning Committee (PISC)‖ headed  by  Secretary  (Heavy  Industry)  shall  be  constituted  for  overall  monitoring,  sanctioning  and implementation of the scheme as per the composition given in Annexure 1.
7. This  committee  will  have  the  power  to  sanction  assistance  for  projects  under  the  scheme  and  modify parameters for various components and sub components of the scheme including their outlay depending on emerging requirements with the overall objective of enhancing the coverage of e-mobility. This committee will also be the competent authority to decide other scheme parameters for smooth implementation of the scheme as well as to resolve issues as may come during implementation.
8. The scheme is proposed to be implemented through the following verticals:
- a) Demand Incentives
- b) Establishment of network of Charging Stations
- c)  Administration  of  Scheme  including  Publicity,  IEC  (Information,  Education  &  Communication) activities.
9. The breakup of fund allocation year wise, component-wise, for the scheme's duration is given below (All amounts are in Rs. Crore)
10. To  retain  flexibility  in  the  implementation  of  the  scheme  there  shall  be  flexibility  in  changing  inter  se allocation among various components and sub-components and year wise fund allocation. PISC shall be the competent authority to modify fund allocations among different segments and different types of vehicles. This flexibility in the budget will be exercised depending upon the offtake in the different components as well as within different sub components of the scheme.
11. The  efforts  of  the  central  government  to  promote  e-mobility  need  supplemental  support  from  State Governments. States need to offer bouquet of fiscal and non-fiscal incentives to be notified separately in order for entities dependent on State support to be eligible for central assistance under this scheme. Some such  non  fiscal  incentives  include  waiver  /  concessional  road  tax,  exemption  from  permit,  waiver  / concessional toll tax, waiver / concessional parking fees, concessional registration charges etc. States would be encouraged to expand these incentives.
12. Department of Heavy Industry (DHI) shall be the nodal Department in Government of India and shall be responsible  for  planning,  implementation  and  review  of  the  scheme.  DHI  shall  be  the  nodal  agency  for addressing  issued  related  to  the  guidelines  and  for  removal  of  difficulties  in  the  implementation  of  the scheme. DHI shall issue guidelines as and when necessary in order to meet such objectives of the scheme.

| Sr. No.           | Component                                                      |   2019-20 |   2020-21 |   2021-22 |   Total Fund requirement in crores |
|-------------------|----------------------------------------------------------------|-----------|-----------|-----------|------------------------------------|
| 1                 | Demand Incentives                                              |       822 |      4587 |      3187 |                               8596 |
| 2                 | Charging Infrastructure                                        |       300 |       400 |       300 |                               1000 |
| 3                 | Administrative Expenditure including Publicity, ICE activities |        12 |        13 |        13 |                                 38 |
| Total for FAME-II | Total for FAME-II                                              |      1134 |      5000 |      3500 |                               9634 |
| 4                 | Committed expenditure of Phase -I                              |       366 |         0 |         0 |                                366 |
| Total             | Total                                                          |      1500 |      5000 |      3500 |                              10000 |

## Scheme Parameters: Demand Incentives:

13. Demand incentives are an important component of the scheme which directly help in demand generation of electric vehicles by way of reducing the cost of acquisition of such vehicles.
14. Demand incentive shall be available for consumers (buyers/end users) in the form of an upfront reduced purchase price of hybrid and electric vehicles to enable wider adoption, which will be reimbursed to the OEM by Government of India.
15. Following categories of vehicles shall be eligible for demand incentives.
- a. Buses (only Electric Vehicle technology)
- b. Four Wheelers {Electric (EV), Plug in Hybrid (PHEV) and Strong Hybrid (SHEV)}
- c. Three-wheeler (Electric) including Registered E-Rickshaws
- d. Two Wheelers (Electric) Technology Definition of each of these categories to be notified separately.
16. Keeping in view the fact that cost of batteries is one of the main factors of difference in acquisition price of xEVs  and  ICE  vehicles,  the  demand  incentive  would  be  based  on  battery  capacity  (i.e.  energy  content measured in Kw-Hr) used in the such vehicles. Keeping in view market and technology trends in batteries, PISC may revise the Demand Incentive and target number of vehicles from time to time.
17. With greater emphasis on providing affordable and environmentally friendly public transportation options for the masses, scheme will be applicable mainly to vehicles used for public transport or those registered for commercial purposes in 3W, 4W and Bus segments. However, privately owned registered 2Ws will also be covered under the scheme as a mass segment.
18. Vehicles, which are registered as -Motor Vehicle‖ as per the Central Motor Vehicle Rules (CMVR) shall only be eligible for the incentives.
19. Vehicles fitted with only advanced batteries satisfying certain performance criteria will only be eligible for the  demand  incentives  under  this  scheme,  and  for  this  purpose  ‗Advanced  Batteries'  will  be  defined separately under the scheme.

## Quantum of Demand Incentives:

20. In  order  to  rationalize  the  incentives  across  segments  and  across  vehicle  technologies,  it  is  initially proposed to extend uniform demand incentive @ Rs. 10000/- per KWh for all vehicles (including PHEV and Strong Hybrid) except Buses. This will be subject to review and revision by PISC.
21. To encourage public transport, for buses, initial uniform maximum demand incentives @ 20000/- per KWh is proposed subject again to review and revision by PISC. The amount of incentives for buses may further be  subject  to  competitive  bidding  among  the  Original  Equipment  Manufacturers  (OEMs)  conducted  by public sector transport undertakings for intra-city, inter-city or inter-State buses based on OPEX model.
22. The proposed incentives as stated above would be reviewed annually or earlier by the PISC based on price trends for various components and assemblies and market parameters such as offtake of vehicles. It shall allow  the  scheme  to  leverage  limited  budgetary  funds  for  larger  number  of  vehicles,  within  the  overall outlay so as to provide economies of scale to the industry for sustainable manufacturing.
23. Demand Incentives for electric buses will be provided only on operational expenditure model adopted by State/city transport corporation (STUs) and other public entities working in the transport sector to augment the fleet of electric vehicles.
24. Vehicle segment wise approximate amount of incentives, initial target number of vehicles and other details are given in Annexure 2.

## Conditions to avail Demand Incentives:

25. In order to restrict high-end vehicles from availing Government funded demand incentives, it is proposed to restrict  incentives  to  vehicles  with  ex-factory  price  less  than  a  particular  threshold  value  as  stated  in Annexure 2.
26. Depending upon the offtake of vehicles under the scheme, maximum incentive per vehicle is proposed to be capped at certain percentage of cost of vehicle to be reviewed by PISC annually and as often as required. To  begin  with,  the  cap  on  incentives  for  buses  will  be  40%  of  the  cost  of  vehicles  and  for  all  other categories it will be 20%.
27. In order to avail scheme incentive for any of the model manufactured by OEM, each such OEM, needs to be registered with DHI/NAB.
28. Each vehicle model needs to satisfy minimum technical eligibility criteria with regard to performance and efficiency of vehicles to be notified separately and get it type approved as per prescribed / standard test procedure at the recognised testing agencies as notified under the Rule 126 of Central Motor Vehicle Rules by the Ministry of Road Transport and Highways. These testing agencies
29. To meet the qualifying criteria for the demand incentives, the hybrid/electric vehicle (xEVs) including its variants and versions, should

(a) be manufactured in the country and have such percentage of localisation as may be notified from time to time;

(b)  meet  provisions  contained  in  Central  Motor  Vehicle  Rules  (CMVR)  in  terms  of  type  approval, classification, categorization, definition, road  worthiness,  registration  etc. as  per  the  provisions contained in CMVR;

- (c) obtain certificate of FAME India Phase II eligibility fulfilment from recognised testing agencies;

(d) be accompanied by at least three-year comprehensive warranty including that of battery from the manufacturer and to have adequate facilities for after sales service for the life of vehicle;

(e) be fitted with suitable monitoring devices to know the mileage of vehicles to determine the total fuel savings on a real time basis; and

(f) should appropriately display a sticker indicating that it has been purchased under the scheme. Format of the sticker will be provided by the Department of Heavy Industry.

## Disbursement of Demand Incentives:

30. The demand incentive for all segments, except buses shall be disbursed through an e-enabled framework and  mechanism  set-up  under  DHI.  The  manufacturers  of  vehicles  (OEMs  or  Original  Equipment Manufacturers) will submit their claims for reimbursement of demand incentive on monthly basis to the Department  of  Heavy  Industry  for  settlement.  Detailed  guidelines  for  reimbursement  of  claim  through Demand Incentive Delivery Mechanism (DIDM) will be issued separately.
31. Detailed guidelines/ mechanism for deployment of electric buses and disbursement of demand incentives through State Transport Undertakings shall be notified separately.

## Scheme Parameters: Charging Infrastructure:

32. The Scheme envisages support for setting up of adequate public charging infrastructure to instill confidence amongst  EV  users,  through  active  participation  and  involvement  of  various  stakeholders  including Government agencies, industries, and Public Sector Enterprises (PSEs).
33. All  these  charging  infrastructures  will  be  established  as  per  Ministry  of  Power  Notification  vide  No. 12/2/2018-EV  dated  14th  Dec  2018  on  the  subject  -Charging  Infrastructure  for  Electrical  Vehicles  Guidelines and Standards‖ and as amended from time to time.
34. In addition, for charging of electric buses, it is proposed to provide to the buyer one slow charger per ebus and one fast charger for every 10 electric buses to be funded under the scheme.
35. Flexibility of funding for establishment of charging infrastructure to the extent of 100% of cost depending upon the project proposal shall be available for promoting electric mobility.
36. Projects  for  charging  infrastructure will  also  include  infrastructure  projects  required  for  extending electrification for running of vehicles like pantograph charging, flash charging etc.
37. Inter-linking of renewable energy sources with charging infrastructure, smart grid, use of ICT etc. shall be encouraged.

## Scheme operationalization

38. For  smooth  operation  and  implementation  of  the  scheme,  knowledge  partners  /  technical  expertise  and other logistic support shall be put in place.
39.  A suitable IEC program shall be undertaken for creating consumer awareness and promotion of the scheme, on a need basis, through education and training, publicity, organization of business meets/seminars/conferences/symposia etc. by Department  of Heavy  Industry, Industry Association, Voluntary Organizations, etc.
40. Projects sanctioned under FAME India Scheme Phase I shall continue to be in operation as per terms and conditions  issued  at  the  time  of  sanction.  Similarly,  Electric  Buses  sanctioned  to  different  state/city transport  corporation  under  FAME  India  Phase  I  shall  continue  to  be  in  operation  as  per  terms  and conditions at the time of sanction.
41. Department of Heavy Industry will be responsible for overall implementation of scheme and removing any obstacle if arises during the implementation of scheme.

[F. No. 1(1)/2019-AEI] PRAVIN L. AGRAWAL, Jt. Secy. Annexure 1

Composition of Project Implementation and Sanctioning Committee (PISC)

| (a) Secretary, Heavy Industry         | Chairman         |
|---------------------------------------|------------------|
| (b) CEO, NITI Aayog                   | Member           |
| (c) Financial Advisor, Heavy Industry | Member           |
| (d) Secretary, D/o DPIIT              | Member           |
| (e) Secretary, M/o RTH                | Member           |
| (f) Secretary, D/o EA                 | Member           |
| (g) Secretary, M/o Power              | Member           |
| (h) Secretary, M/o NRE                | Member           |
| (i) Director ARAI                     | Member           |
| (j) Joint Secretary, Heavy Industry   | Member Secretary |

Committee may co-opt any other member as and when required.

## Annexure 2 Vehicle segment-wise incentives, Maximum Number of vehicles to be supported and other details.

| Sr. No.   | Vehicle Segment                               | ## Maximum Number of vehicles to be supported   | Approximate Size of battery in KWH   | ##Total Approximate Incentive@ 10000/KWh for all vehicles and 20000/KWh for Buses and Trucks   | Maximum Ex- factory price to avail incentive   | Total fund support from DHI   |
|-----------|-----------------------------------------------|-------------------------------------------------|--------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------|-------------------------------|
| 1         | Registered e-2 Wheelers                       | 1000000                                         | 2KWH                                 | Rs.20000/-                                                                                     | Rs.1.5 Lakhs/                                  | Rs.2000 Cr                    |
| 2         | Registered e-3 Wheelers (including eRikshaws) | 500000                                          | 5KWH                                 | Rs.50000/-                                                                                     | Rs.5 Lakhs/                                    | Rs.2500 Cr                    |
| 3         | e- 4 Wheelers                                 | 35000                                           | 15 KWH                               | Rs.150000/-                                                                                    | Rs.15 Lakhs/                                   | Rs.525 Cr                     |
| 4         | 4W Strong Hybrid Vehicle                      | 20000                                           | 1.3KWH                               | Rs.13000/-                                                                                     | Rs.15 Lakhs/                                   | Rs.26 Cr                      |
| 5         | e-Bus                                         | 7090                                            | 250KWH                               | Rs.50 Lakhs/-                                                                                  | Rs.2 Crores                                    | Rs.3545 Cr                    |
|           |                                               |                                                 |                                      |                                                                                                |                                                | Rs.8596 Crore                 |

## The proposed amount of incentives per KWH are, however, subject to review as per the reduction in battery costs & thereby reduction in vehicle cost and would be notified accordingly from time to time. It is to be noted that the number of vehicles and fund support among the sub components as above is fungible with the approval of PISC.

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