India’s EV policy to only incentivize if automakers localize their content

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Electric Vehicles in India is a hot topic right now. Everyone wants a piece of that market but no one wants to invest. It is a market that is going to boom for sure and it is a market which is going to have a lot of hands in it. However, it is a market which is novice almost all around the world. That is the reason why people are really working in this field. The engineers are looking at electrical as a field of the future.

There was a time when IT was the only field budding students in India selected. However, a core subject like electric will never have an end. The current scenario is evidence of the same. That said, EVs in India are having a tough time. The reason for that is not one but many. There are many things that need to go right but at the moment nothing is working for the Indian government as it is failing to attract businessmen in India.

The government recently announced a Feebate policy which was going to add taxes on the fuelled vehicles and use that money to fund EVs. However, that plan has been delayed because of the General Elections because of the insecurities of the ruling party. That said, the government was not sure if the people of India would like the idea of adding taxes and so the plan is delayed until elections.

That said, there is another thing the government has added which is a good move. FAME-II has a lot of incentives and the automakers can avail them all. However, the problem lies with the localization of the same. Only the fleet operators will be allowed to make the full of incentives offered by the government. The other companies will have to make sure that they have at least 50% of their content based in India. That number is true for cars, two-wheelers, and e-rickshaws. The e-bus makers will have to make sure they have 40% of the content localized. This is how the government is going to operate from now on.

The incentives will add up if there are Li-ion batteries used in the vehicles and are registered with appropriate authorities. Apart from this, there are subsidies on offer of more than INR 8,800 crore for the people buying Electric Vehicles. This is how desperately the government wants people to shift to EVs.

The infrastructure was always a problem in India, however, it might go away as the government has finally awarded INR 1,200 crore to build the charging infrastructure all around the country. The government has instilled INR 10,000 crore over the next three years. This will take the number of cars 55,000 with Li-ion batteries and the two-wheelers to 10,00,000. This might actually work as the money is now there to spend, the only problem now is who is willing to bring the technology back down to the Indian market. Only time will tell.

-Unmesh Phule

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