About the PM E-DRIVE Scheme
- PM E-DRIVE Scheme is aimed at promoting electric mobility in India having a financial outlay of Rs 10,900 crore over two years.
- It has been launched to replace FAME II.
Scope:
- PM E-DRIVE Scheme offers fiscal incentives to around 25 lakh electric two-wheelers, 3 lakh electric three-wheelers, and 14,000 electric buses through demand incentives.
- Automakers can claim reimbursements for eligible electric vehicle (EV) sales, similar to the previous FAME-II scheme.
- However, electric cars are notably excluded from the subsidy.
Fund Allocation: Rs 10,900 crore
Time Period: 2024-26
Targets: Support e-2Ws, e-3Ws, and e-buses
Other Provisions:
- Installation of Electric vehicle public charging stations (EVPCS) in selected cities and on selected highways.
- Test agencies to be modernised to deal with the new and emerging technologies to promote green mobility.
Key Features of the scheme
Subsidies:
- Demand incentives for consumers (buyers/end users) to purchase certain categories of EVs (refer to the infographic).
- Aadhaar-authenticated e-Vouchers for EV buyers will be generated through PM E-DRIVE app/portal to reduce the upfront purchase price of EVs.
- The amount will be reimbursed to the original equipment manufacturer (OEM) by the Government of India.
- Proposed incentive (based on battery capacity i.e. energy content measured in kWh): 5,000 per kWh in FY 2024-25 and ₹2,500 per kWh in FY 2025-26 for e-2W and e-3W categories (both capped at 15% of ex-factory price).
Grants for the creation of capital assets:
- PM E-DRIVE Scheme includes e-buses, the establishment of a network of Electric vehicle public charging stations (EVPCS) & upgradation of identified testing agencies.
- Support for e-buses will be provided through State/ city transport undertakings (STUs) on the operational expenditure (OPEX)/ gross cost contract (GCC) model.
- e-buses with ex-factory price less than ₹2 crore will be incentivised.
- EVPCS shall be installed in the selected cities (9 cities initially like Mumbai, Delhi, Bangalore, etc) with high EV penetration and also on selected highways.
- Charging infrastructures will be established as per Ministry of Power (MoP) “Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure-2024” and further amendments
- Project management agency (PMA): The PM E-DRIVE Scheme shall be implemented through a PMA, which shall be responsible for providing secretarial, managerial and implementation support.
What was the FAME Scheme?
- The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) policy aimed to reduce vehicular emissions, decrease fuel consumption, and encourage sustainable transportation.
- It was introduced in 2015 under the National Electric Mobility Mission Plan (NEMMP).
Key Phases
- FAME I (2015-2019): Focused on providing incentives for the purchase of electric and hybrid vehicles and supported the development of charging infrastructure.
- It aimed to promote cleaner mobility in public and private sectors.
- FAME II (2019-2024): Expanded the scope, providing USD 1.19 billion to encourage the adoption of electric vehicles, particularly in public transport (e-buses, 2-wheelers, and 3-wheelers).
- It also emphasized building a robust charging infrastructure and targeted reducing emissions from commercial fleets.
Key Facts About the Promotion of Electric Cars
- Impact of Exclusion of Electric Cars in PM E-DRIVE:
- The absence of fiscal incentives following the end of FAME-II has led to a decline in electric car sales.
- Between April and August 2024, registrations of electric cars dropped by 9% compared to the preceding months when FAME-II was active.
- Inadequate Charging Infrastructure:
- According to the Bureau of Energy Efficiency, India has approximately 25,000 public charging stations for its 46 lakh registered EVs.
- The current ratio of 184 EVs per charging station is much higher than in other countries actively promoting e-mobility.
- Supporting Measures Beyond Subsidies:
- Production Linked Incentive (PLI) Schemes: The government is supporting the EV sector through PLI schemes for auto components and advanced cell chemistry (ACC) batteries.
- These incentives could help lower production costs by fostering economies of scale, especially in the EV supply chain.
- Lower GST and State-Level Exemptions: Electric cars continue to benefit from a lower Goods and Services Tax (GST) rate of 5%, compared to 28% on hybrid and CNG vehicles, and 49% on internal combustion engine vehicles.
