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India Unveils PM E-Drive Scheme To Support Electric Vehicle Adoption And Charging Infrastructure
The Indian government has introduced the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme. This initiative replaces the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME II) scheme, which ended in March. However, the new scheme has a smaller budget.
Focus on Two-Wheelers and Three-Wheelers
The PM E-Drive scheme, managed by the Ministry of Heavy Industries, will run for two years with a budget of Rs 10,900 crore. It aims to provide subsidies for electric two-wheelers, three-wheelers, trucks, buses, and ambulances. Additionally, it will support the installation of 88,500 electric vehicle charging stations.
Unlike previous schemes, PM E-Drive does not offer subsidies for electric or hybrid cars and SUVs. The government stated, "Subsidies/demand incentives worth Rs 3,679 crore have been provided to incentivize e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs. The scheme will support 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses."
Mr. Sudarshan Venu, MD TVS Motor Company, speaking about the new scheme said, ""We welcome the PM E-Drive Scheme in line with the vision of Hon'ble Prime Minister Narendra Modi for Viksit Bharat. It will continue to drive faster adoption of EV in India and further boost local innovation and manufacturing".
Charging Infrastructure Expansion
The scheme includes provisions for procuring 14,028 electric buses by state transport units and public transport agencies with an allocation of Rs 4,391 crore. It also proposes installing 22,100 fast chargers for electric four-wheelers, 1,800 fast chargers for electric buses and 48,400 fast chargers for electric two- and three-wheelers with a budget of Rs 2,000 crore.
Further details about the subsidy amounts per vehicle and required localisation levels will be disclosed once the government issues a notification on the scheme.
Background on FAME Schemes
The first phase of the FAME scheme began in 2015 with an outlay of Rs 895 crore over five years. FAME II followed in 2019 with an initial budget of Rs 10,000 crore for three years ending in 2022 but was extended to March 2024 with an additional Rs 1,500 crore.
FAME II aimed to support one million electric two-wheelers, half a million electric three-wheelers, 55 thousand electric four-wheelers and seven thousand electric buses. The scheme ultimately supported over eleven lakh two-wheelers and more than one lakh three-wheelers.
Temporary Measures Post-FAME II
After FAME II expired in March this year, the government launched a temporary EMPS 2024 scheme with an outlay of Rs 500 crore. Initially valid until July end but extended till September end with an increased budget of Rs 778 crore.
EMPS provided incentives only for electric two- and three-wheelers at reduced levels compared to FAME II. The target was to support over five lakh electric vehicles comprising mainly two-wheelers.
Challenges in EV Adoption
Two-wheelers accounted for fifty-six percent of last year's EV sales while three-wheelers made up thirty-eight percent. Affordability issues and limited charging infrastructure have hindered faster adoption of EVs.
Subsidies play a crucial role in early-stage EV adoption by reducing upfront costs. Most EV manufacturers advocate continuing subsidies until the market matures.
The new PM E-Drive scheme aims to address these challenges by focusing on affordable segments like two- and three-wheelers while expanding charging infrastructure significantly.
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