Centre likely to give direct sops to get EV manufacturing in top gear

• The Centre is considering a new policy for electric vehicles (EVs) that will incentivize manufacturer.
• The policy will include foreign original equipment manufacturers (OEMs)
• looking to set up a base in India, as part of a comprehensive policy for the sunrise sector.

Government Initiative to Promote EV in India

• The government currently runs different schemes for EV promotion
  • The FAME
    • The Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) Scheme provides financial incentives to both EV manufacturers and buyers.
    • The scheme will run till 2024 with a total budget of $1.3 billion.
  • PLI schemes.
    • The Production Linked Incentive (PLI) Scheme for Automotive Sector has an outlay of $3.1 billion.
    • It provides incentives to manufacturers of advanced automotive technology (AAT) products, including EVs.
    • Another PLI for advanced chemistry cell (ACC) battery storage provides incentives to manufacturers of ACC batteries, which are a key component of EVs.
    • The scheme has a budgetary outlay of $2.1 billion.
  • Phased Manufacturing Programme (PMP)
    • The Phased Manufacturing Programme (PMP) of the government aims to promote the localisation of EV production in India.
    • The PMP has different timelines for different components of EVs, with the aim of making India self-sufficient in EV production by 2030.
    • Though PLI for batteries is yet to take off, the Indian EV manufacturing sector is growing rapidly.

Current Developments on New Policy on Electric Vehicles

• The discussion process on new policy is being led by the Department of Promotion of Industry and Internal Trade (DPIIT).
• The proposed policy will differ from these as it will roll out direct incentives linked to quantum of investments rather than offer consumer subsidies,
• The policy would aim at increasing the domestic value addition in the EV ecosystem to at least 50%.
• The policy seeks to expedite adoption of EVs in the country.

Current Status of Electric Vehicles in India

• In 2022-23, India produced over 450,000 EVs, up from 230,000 lakh in the previous year.
• The Economic Survey 2023 predicts that India’s domestic electric vehicle market will see a 49% compound annual growth rate (CAGR) between 2022 and 2030. M
• The survey assesses annual sales of 10 million by 2030.

Prelims Takeaway

• FAME Scheme
• PLI Scheme
• Phased Manufacturing Programme