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Govt makes localisation of auto components in e-vehicles mandatory for subsidy benefits, issues draft norms

Making the indigenisation clause stricter in its bid to promote green vehicles, the government has made it mandatory for electric vehicle (EV) manufacturers to use locally made key auto components to avail subsidy benefits, said a media report. Accordingly, control units, chargers and AC units are among the list of components that have been brought under the benefits scheme.

The department of heavy industry in latest draft guidelines on Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme (FAME), lists the components that must be compulsorily built locally, with specific deadlines, said a report in Mint.

The department of heavy industry, which implements the scheme, has brought the manufacturers of electric and hybrid two-wheelers, three-wheelers, rickshaws, four-wheelers and electric buses, along with associated deadlines for localisation under the new subsidy norms, the report said.

In March this year, finance minister Arun Jaitley had said that the Union Cabinet cleared an Rs 10,000-crore programme under the FAME II scheme, reported PTI.

 Govt makes localisation of auto components in e-vehicles mandatory for subsidy benefits, issues draft norms

Representational image. Reuters

FAME, which was introduced on 1 April 2015, entered its second phase (FAME-2) in April 2019.

The main objective of the scheme is to encourage faster adoption of electric and hybrid vehicles by way of offering an upfront incentive on the purchase of electric vehicles and also by way of establishing necessary charging infrastructure for EV, Jaitley had said.

The emphasis will be on electrification of public transport that includes shared transport, demand incentives on operational expenditure mode for electric buses will be delivered through state/city transport corporations (STUs), the statement said.

In three-wheeler and four-wheeler segments, incentives will be applicable mainly on vehicles used for public transport or registered commercial purposes, it said.

In the two-wheeler segment, the focus will be on private vehicles.

In January this year, state-owned Bharat Heavy Electricals Ltd (BHEL) had announced that the firm would set up a network of solar-based e-vehicle chargers (SEVC) on the Delhi-Chandigarh highway, according to a PTI report.

"The establishment of EV chargers at regular intervals over the entire 250 km stretch between Delhi and Chandigarh would allay range-anxiety among the e-vehicle users and bolster their confidence for inter-city travel," the company said.

BHEL said it will design, engineer, manufacture, supply and install the EV charging stations along with a central monitoring system.

In January this year, Bajaj Auto had said that it was planning to make a foray into EV in 2020, simultaneously with the migration of its conventional engine vehicles to BS-VI emission norms, reported PTI quoting company's managing director Rajiv Bajaj.

The company plans to launch the electric version of its quadricycle Qute along with electric three-wheelers next year, even as it gears up to introduce the conventional engine version of the quadricycle around March after much delay. It is also working on an electric scooter.

In December last year, the government drafted a new plan to impose a levy of Rs 12,000 on purchase of new petrol and diesel cars in a bid to incentivise the use of EVs and manufacture of batteries.

The NITI Aayog, the government’s apex policy think tank, has proposed incentives ranging from Rs 25,000-50,000 in the first year for those customers buying electric two-wheelers, three-wheelers and cars, government officials said.

In September 2018, the government decided to exempt EVs and automobiles run on alternative fuel from permit requirements in a bid to boost such vehicles in the country, reported PTI.

Urging automakers to focus in this direction, Union minister Nitin Gadkari said that demand for EVs could also be created by mandating cab aggregators like Ola and Uber to induct a certain percentage of such vehicles in their fleet.

With PTI inputs

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Updated Date: May 07, 2019 16:38:46 IST