ANALYSING THE GOVERNMENT’S NEW ELECTRIC VEHICLE POLICY
Yuvraj Pandey,
University of Allahabad
INTRODUCTION:
The government of India in a recent development has launched a New Electric Vehicle Policy, 2024 which focuses on strengthening the government’s MAKE IN INDIA initiative, along with making India the world's electric vehicle manufacturing hub in the upcoming future.
The government through the policy wants to focus on local manufacturing and achieving new heights in the field of electric vehicles under the automobile sector relating to its technological and componential development.
Earlier also the government has launched the National Electric Mobility Mission Plan (NEMMP) with the aim to achieve the sale of 6-7 Million electric and hybrid vehicles in India in 2020.
Under NEMMP the government launched the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME) Scheme for the promotion and production of electric and hybrid vehicle technology.
ANALYSIS OF THE NEW ELECTRIC VEHICLE POLICY, 2024:
AIMS OF THE POLICY:
●The government deducted the customs duty on the import of electric vehicles to 15% along with the minimum valuation of $35,000 for Cost, Insurance and Freight for the upcoming 5 years .
● The policy demands the manufacturers to invest at least Rs.4150 crore for duty concession and with no maximum investment limit. The policy further demands the manufacturing company to install their vehicle manufacturing plant in India within 3 years of their investment to get Minimum Domestic Value Addition.
●The policy allowed the maximum import of 40,000 electric vehicles for the next 5 years of investment, setting the maximum import limit of electric vehicles to 8,000 yearly.
●The bank guarantees to be returned only after 50% Domestic Value Addition or after investing Rs.4150 crore at least.
●The Ministry of HEAVY INDUSTRY will look into this matter.
BENEFITS OF THE POLICY: [i]
●The policy provides the benefit of increasing the tech progress in the electric vehicle field under automobile sector making India the hub of electric vehicles.
●It will also boost the local manufacturing and will strengthen the MAKE IN INDIA initiative.
●It will further reduce the dependency of India on the crude oil import from Arab nations cutting the trade deficit to more than 70% low and help increase the forex reserve of India .
●It will strengthen the commitment of India at COP26 (Conference of Parties to make India carbon neutral and achieve net zero till 2070 by reducing the carbon emission by 45% till 2030 to 100% till 2070 which we have planned.
IMPACT OF THE POLICY ON INDIA'S AUTOMOBILE SECTOR:
● The policy aims to attract global car companies and investors such as TESLA, BYD in the electric vehicle field of the automobile sector in India by offering incentives and reduced import tariffs.
●The policy will bring employment in India specially in manufacturing, technology, sales and service sector.
● India, which is the 3rd largest global manufacturing market for the automobile industry, wants to emerge as a global manufacturing hub of electric vehicles for which this policy is going to play a very crucial role.
● The automobile market of India has seen the sales surge of 45% in 2024 to the registration of 15 lakh electric vehicles in 2023.
INDIA’S ELECTRONIC VEHICLE MARKET:
● The electric vehicle sector of India will grow from $3.21 billion to $113.99 billion from 2022 to 2029 and the compound annual growth rate will be more than 66%.
● The government for this sector has launched the Electric Mobility Promotion Scheme, 2024 which focuses on promoting the purchasing and selling of electric 2-wheeler and 3-wheeler vehicles.
● The government under the National Electric Mobility Mission Plan launched the FAME India Scheme under which FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) 1 and 2 initiatives were launched with the aims of promoting, adopting and producing electric vehicles in India.
CHALLENGES TO THE EV POLICY:[ii]
●The first and the foremost challenge to India's electric vehicle sector is the limited access to charging stations especially outside the smart cities.
●The second is the high cost of import of electric vehicle materials such as lithium and cobalt which increases the cost of batteries for electric vehicles in India after its production.
●The third is the installation and maintenance cost of charging stations because of costly manufactured electric vehicle batteries and evolving battery technology with lack of trained technicians.
● The low availability of service centres along with the misconception of battery explosion in electric vehicles amongst buyers in the recent past makes it hard for them to switch from gasoline vehicles to electric vehicles.
NATIONAL ELECTRIC MOBILITY MISSION PLAN (NEMMP):
The Electric Vehicle Policy, 2024 falls under this scheme as it is the Parental scheme for Electric Vehicle promotion in India. The government of India under its National Electric Mobility Mission Plan (NEMMP) is aiming to achieve the sales of 6-7 million of electric and hybrid vehicles in India. It aims to promote hybrid and electric vehicles for successfully fulfilling National Fuel Security goals. The National Electric Mobility Mission Plan (NEMMP) intends to allow hybrid and electric vehicles to become the first choice for the purchasers so that these vehicles can replace the conventional vehicles.
Various Steps to effectively implement NATIONAL ELECTRIC MOBILITY MISSION PLAN (NEMMP):
● The Government provided the Demand side incentives for procurement and acquisition of hybrid/electric vehicles.
● They also started promoting Research & Development in the field of technology which includes the technology of batteries, power electronics, motors, integrating the system, management of battery systems, testing of infrastructure and ensuring the industrial participation for the same.
● The government appreciated the promotion of charging infrastructure.
● The government also provided the Supply side incentives.
OBJECTIVES OF THE NATIONAL ELECTRIC MOBILITY MISSION PLAN (NEMMP):
The government through this NEMMP aims to achieve the goals of Nation's National Energy Security.
It further aims at limiting the worst impact of petroleum using vehicles on the environment.
It also aims at the growth and development of the domestic manufacturing market in Electric Manufacturing under the automobile sector.
FEW GOVERNMENT INITIATIVES FOR FASTER EV PROMOTION IN INDIA:
The government through various means and measures provided the incentives or taken steps for the promotion of electric vehicles in India. Some of them are:
A tax cut has been announced on the loan amount taken for the purchase of Electric Vehicles in India.
GST rates on electric vehicles have been slashed from the earlier 28% with cess to 12% with no cess.
The distribution of electricity has been given as a 'Service' for the charging of electric vehicles with the aim to attract investments into charging infrastructure of Electric Vehicles through this attractive incentive.
The Ministry of Road Transport Highways in the official gazette issued a notification regarding the incentive provided for the permit of battery-operated vehicles.
FAME INDIA SCHEME:
● The Ministry of Heavy Industries has implemented the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme Phase-II for a period of five years commencing from 1st April, 2019 with a total budgetary support of Rs. 10,000 crore.
●This phase basically focuses on providing support for the electrification of public & shared transportation with the aim to support through demand incentive 7090 eBuses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2 Wheelers.[iii]
● In addition, creating the charging infrastructure is also aimed under the Scheme.
MAKE IN INDIA INITIATIVE:
● The Make in India initiative of the Government of India was launched on September 25, 2014, to facilitate investment, foster innovation, build best-in -class infrastructure, and make India a hub in manufacturing, designing and innovation.
● The Top priority for the Indian Government is the development of a robust manufacturing sector.
● Since its launch, Make in India focuses on 27 sectors and has made significant achievements.[iv]
● The Make in India initiative is implemented across various Governments/Ministries, Councils, Committees and State Governments etc….
CONCLUSION:
The government in order to make the electric vehicle market ever expanding and fast growing should first encourage the private investors to invest in commercial high-speed chargers for expanding charging stations and its network outside smart cities. As soon as possible the government should implement the Battery Swapping Policy mentioned under the Union Budget 2022. They should arrange the campaigns to educate the public on the benefits of using electric vehicles at the place of gasoline vehicles along with the exhibitions to motivate buyers on the various evolving technologies, facilities they’ll get with electric vehicle purchases. They should also provide relaxation on the purchase of electric vehicles to buyers for attracting the public and boost the sales and production of it. They should manage the fleet and charge management program for easy access and mobility of electric vehicles in India. They should also open the market for foreign investors in India for fair competition which will control the price of vehicles in Indian market as it will promote competition and cure the disease of monopoly along with providing various options to the consumers on fair prices. With these steps only, the government can achieve the dream of becoming a manufacturing hub of electric vehicles in the automobile sector in India.
REFERENCES:
The Following sites have been referred for study and understanding of this topic:
Drishti IAS (https://www.drishtiias.com/daily-updates/daily-news-analysis/new-electric-vehicle-policy-2024) Referred on 22 June, 2024.
Study IQ IAS (https://www.studyiq.com/articles/new-electric-vehicle-policy/) Referred on 23 June, 2024.
Vision IAS (https://visionias.in/current-affairs/monthly-magazine/2024-04-15/economics-(indian-economy)/electric-mobility-promotion-scheme-emps-2024-1#:~:text=The%20Ministry%20of%20Heavy%20Industries,of%20Electric%20Vehicles%20in%20India.) Referred on 23 June, 2024.
Vajiram and Ravi (https://vajiramandravi.com/upsc-daily-current-affairs/prelims-pointers/electric-mobility-promotion-scheme-2024/#:~:text=About%20Electric%20Mobility%20Promotion%20Scheme,2024%20till%2031st%20July%202024.) Referred on 23 June, 2024.
[i] Government approves E- Vehicle policy to promote India as a manufacturing destination for EVs: PIB India - (https://pib.gov.in/PressReleasePage.aspx?PRID=2014858#:~:text=The%20Union%20Government%20has%20approved,by%20reputed%20global%20EV%20manufacturers) referred on 29 July.
[ii] Government approves E- Vehicle policy to promote India as a manufacturing destination for EVs: PIB India - (https://pib.gov.in/PressReleasePage.aspx?PRID=2014858#:~:text=The%20Union%20Government%20has%20approved,by%20reputed%20global%20EV%20manufacturers) referred on 29 July.
[iii] Fame India Scheme: PIB India - (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1942506) referred on 29 July.
[iv] Make in India initiative to make India a hub for manufacturing, design and innovation: PIB India - (https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1947211#:~:text=Make%20in%20India%20initiative%20was,priority%20of%20the%20Indian%20Government) referred on 29 July.