Lok Sabha Question No. 1451 (UNSTARRED), answered on 2022-07-26
Subject: Manufacturing of Hybrid and Electric Vehicles
Ministry: HEAVY INDUSTRIES
Asked by: Pradeep Kumar Singh

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 1451

ANSWERED ON 26.07.2022

## MANUFACTURING OF HYBRID AND ELECTRIC VEHICLES

## 1451. SHRI PRADEEP KUMAR SINGH:

Will the Minister of HEAVY INDUSTRIES भारी उद्योग मंत्री be pleased to state:

- (a) the present status of the manufacturing of hybrid and electric vehicles in the country;
- (b) the reasons for very slow pace of implementation of Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme; and
- (c) the fresh steps taken by the Government to bring down the cost of electric/hybrid vehicles at par with those Internal Combustion Engines (ICEs)?

## ANSWER

## THE MINISTER OF STATE FOR HEAVY INDUSTRIES (SHRI KRISHAN PAL GURJAR)

(a): Sir,  the  Ministry  of  Heavy  Industries  formulated  a  Scheme  Faster  Adoption  and Manufacturing  of  (Hybrid  &)  Electric  Vehicles  in  India  (FAME  India)  Scheme  in  2015  to promote adoption of electric/ hybrid vehicles (xEVs) in the country.    At present, Phase-II of FAME India Scheme is being implemented for a period of 5 years w.e.f. 01 st April, 2019 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.  As on 15 th July, 2022, 58 original equipment manufacturers (OEMs) of e-2W, e-3W & e- 4W have been registered and sold about 4.75 lakhs EV under phase-II of FAME-India Scheme.

- (b) & (c): The reasons for slow pace in implementation of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme have been mainly:

(i) High upfront cost of electric vehicle as compared to corresponding IC engine vehicle.

(ii) Customer anxiety about range of electric vehicle.

(iii) Limited models available in India compared to internal combustion engine (ICE) vehicles especially in Electric car segment.

However, the following steps have been taken by the Government bring down the cost of electric/ Hybrid vehicles on par with those with internal combustion engines:

- i. The demand incentive for electric two wheelers has been increased to Rs. 15,000/KWh from Rs. 10,000/KWh with an increase in cap from 20% to 40% of the cost of vehicle from 11 th June, 2021, thus enabling cost of Electric two wheelers at par with that of ICE two wheeler vehicles.
- ii. The  Government  on  12th  May,  2021  approved  a  Production  Linked  Incentive  (PLI) scheme for manufacturing of Advanced Chemistry Cell (ACC) in the country in order to bring  down  prices  of  battery  in  the  country.  Drop  in  battery  price  will  result  in  cost reduction of electric vehicles. The PLI Scheme for Automobile and Auto Component was notified on 23 rd September, 2021 has the provision for incentivizing Electric Vehicles.
- iii. GST on electric vehicles has been reduced from 12% to 5%; GST on chargers/ charging stations for electric vehicles has been reduced from 18% to 5%.
- iv. Ministry  of  Road  Transport  &  Highways  (MoRTH)  announced  that  battery-operated vehicles will be given green license plates and be exempted from permit requirements.
- v. MoRTH issued a notification advising states to waive road tax on EVs, which in turn will help reduce the initial cost of EVs.

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