It should come as no surprise that the Indian Electric Car market is still at a very nascent stage, even with the FAME 1 policy in place, car manufacturers are finding it hard to arrive at a convincing enough price point to validate any interest in the private car market. Most electric car sales are still business to business fleet sales, and while that is a step in the right direction. It is ultimately a drop in the ocean towards sustainable mobility. Albeit in the wake of the 2019 Union budget where the finance minister Piyush Goyal himself reaffirmed the governments’ commitment towards more sustainable mobility and assured that India will be a world leader in electric vehicles. Moreover to achieve their 30% target for EVs in India by 2030, and their first milestone of 1 lakh electric vehicles by 2021. To this end, the promised 5,500 crore FAME 2 initiative needs to come into play and soon.
On the sidelines of a post-budget press round-table, Mahindra’s Managing director Dr Pawan Goenka expressed that he was expecting the FAME 2 scheme to be announced before the 31st March 2019. The final in a long line of extensions to the FAME 1 pilot scheme that was launch in 2015. It had been widely expected that the Prime Minister would announce the scheme that had doubled from an initial Rs 550 crore plan to a Rs 5,500 crore at the Move Summit held last year. Instead, the FAME 1 scheme was extended, what we hope for the last time, till March this year. This plan is expected to bring major subsidies and focus on spiking demand and building a sustainable eco-system for electric vehicles.
Last year, it was reported that depending on the battery type electric scooters and motorcycles could get proper incentives of between Rs 1,800 to Rs 29,000, while in three-wheelers it is between Rs 3,300 and Rs 61,000 as part of the FAME 2 initiative. Whether private cars will get the same benefits is unknown. Luckily, in addition to this state governments are planning to make electric cars free of road tax, which could spike demand. That paired with the fact that electric cars have superior mechanical longevity and lower maintenance could finally be the spark that is needed to start notable growth in the sustainable mobility industry.
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