Electric Mobility Promotion Scheme 2024: Who Does It Not Benefit?

The Electric Mobility Promotion Scheme 2024, introduced by the Indian government, has sparked discussions and debates regarding its potential impacts on the automotive industry, particularly for car manufacturers in India. This scheme, primarily targeting the promotion of electric two- and three-wheelers, has raised questions about its implications for car manufacturers and the country's broader electric vehicle (EV) ecosystem.

Also Read: Big Boost To Tesla As Govt Introduces Electric Mobility Promotion Scheme

The scheme's focus on promoting electric two and three-wheelers aims to facilitate the electrification of transportation at the grassroots level. However, concerns have been raised regarding the duration and scale of support provided. While the short-term incentives may boost initial adoption, the sustainability of the scheme's impact remains in question. The target of one lakh units per month has been criticised for being insufficient to drive substantial change in the electrification landscape.

Avik Chattopadhyay, Co-founder & Partner, Expereal India says, “The government has planned support in both upstream and downstream, which is logical and much required. The key challenge lies in ramping up domestic R&D. The key opportunity lies in the millions of Indians who need electrification in public and commercial transport to improve their lives. The pot of gold lies at the bottom of the rainbow.”

On the new EV Passenger Vehicle Manufacturing Scheme, Vinod Aggarwal, President, SIAM said, “A holistic view has been taken by the Government of India in the best interests of the country. The Indian Automobile Industry and members of SIAM will adapt to this new policy and remain committed to bringing new, innovative & aspirational products and work towards developing a robust EV Ecosystem in the country.”

For new-age start-ups in the EV space, government support through schemes like FAME and the Electric Mobility Promotion Scheme presents both challenges and opportunities. While the support is encouraging, challenges persist in terms of ramping up domestic research and development. Opportunities lie in catering to the vast market of Indians seeking electrification in public and commercial transport, indicating a promising avenue for innovation and growth.

Also Read: ₹ 500 crore Electric Mobility Promotion Scheme Announced For EV Push

Pham Sanh Chau, CEO of VinFast India said, “With a long-term growth commitment in India, we have pledged an expenditure of $500 million, which includes the electric vehicle manufacturing facility in Tamil Nadu. This forward-looking policy helps us introduce a wide variety of smart, green, premium-quality SUVs, at inclusive prices, along with outstanding aftersales policies.”

The focus on electric vehicles for commercial use aligns with the broader goal of sustainable urban mobility in Indian cities. Transitioning commercial vehicles to green energy systems is essential for achieving rapid and sustainable electrification. Policymakers can address crucial aspects of urban mobility and environmental sustainability by prioritising commercial vehicles over personal cars.

The availability of subsidies under the Electric Mobility Promotion Scheme presents an opportunity for the automotive industry to accelerate the development and adoption of EVs. However, the industry must not solely rely on government support. Collaborating with the energy sector to develop EV infrastructure independently can expedite the transition to electric mobility.

Acko Drive reached out to several EV carmakers such as Hyundai, Kia, Tata Motors and even MG, however, the companies have refused to comment.

Mahindra on the other hand, said, “The recently announced EV policy for new entrants reinforces the Make in India momentum, with requirements of bank guarantees, minimum investment commitment, and local value addition. This will help accelerate the EV ecosystem in India. Our Born Electric SUVs are on track to be launched in Jan 2025 with cutting-edge technology. Our products will speak for themselves.”

Policymakers face the challenge of encouraging the adoption of electric vehicles across diverse segments in India. While the scheme's focus on two and three-wheelers is commendable, the absence of incentives for electric buses and four-wheelers raises concerns. Policymakers should prioritize converting government fleets to electric vehicles and mandate the transition of public transport fleets to electric within a specified timeframe.

Shradha Suri Marwah, President of ACMA & CMD Subros Ltd, said, “The policy not only aims to attract global EV majors to invest in India but also emphasizes a significant Domestic Value Addition (DVA) criteria, ensuring the creation of a robust supply-side ecosystem. Aligned with the Government’s vision of reducing our carbon footprint, promoting sustainable manufacturing, and achieving net-zero emissions by 2070, this policy sets the stage for a vibrant future-mobility global manufacturing hub in India.”

The Electric Mobility Promotion Scheme does not explicitly address the entry of foreign brands like Tesla and Fisker into the Indian market. However, the scheme's focus on promoting domestic electrification could indirectly create opportunities for foreign brands to introduce their EV offerings in India, provided they align with the country's electrification goals.