Fame II: Electric car and hybrid vehicle makers raise concerns, say scheme prepared in haste

Updated: March 29, 2019 1:05:51 PM

Conditions such as minimum acceleration, density of the battery and maximum electric energy consumption will make the business unviable for manufacturers as they will have to alter vehicle specifications, resulting in cost increases, people aware of the development said.

Fame II, Electric car, hybrid vehicle makers, electric energy consumption, FAME I schemeTwo-wheeler makers feel, under the new scheme, vehicles will become costlier compared to FAME I scheme, as the subsidy is capped at Rs 10,000 for battery strength of 1 kiloWatt.

By Pritish Raj

Weeks after the government announced a Rs 10,000-crore subsidy outlay for electric and hybrid vehicles, manufacturers have raised concerns over some clauses of the scheme, saying it has been prepared in haste with several complexities.

Conditions such as minimum acceleration, density of the battery and maximum electric energy consumption will make the business unviable for manufacturers as they will have to alter vehicle specifications, resulting in cost increases, people aware of the development said.

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As per the latest notification by the Department of Heavy Industries, under the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) II scheme, two-wheelers will need to have a minimum acceleration of 0.65m/s and four-wheelers would require an acceleration of 1.04m/s. Earlier, there were no norms for acceleration, one of the persons said.

While the notification states that electric and hybrid passenger carriers with a range of 140 km and a minimum speed of 70 km per hour will be eligible for incentives, none of the EVs currently has a range of 140 km and a minimum speed of 70 km per hour. Since only vehicles with up to Rs 15 lakh qualify for the subsidy, for a range of 140km, a bigger lithium-ion battery will be required, which will lead to the cost going beyond Rs 15 lakh.
“The biggest miss is that the subsidy is not for private car buyers, which will certainly discourage consumers,” one of the person mentioned above said.

Two-wheeler makers feel, under the new scheme, vehicles will become costlier compared to FAME I scheme, as the subsidy is capped at Rs 10,000 for battery strength of 1 kiloWatt. Under FAME-I, the subsidy was Rs 20,000 flat for two-wheelers without any condition for the battery strength. “This would mean the same two-wheeler will now be Rs 10,000 costlier,” said an official of an electric two-wheeler maker.

“The subsidy would not help as overall prices will go up, thereby impacting the demand which is already very low, Sohinder Gill, DG at the Society of Manufacturers of Electric Vehicles told FE. Additionally, new norms mandate that two-wheelers should not consume electric energy over 7kwh per 100 km, while cars with length of up to 4 metre should not consume more than 15kwh/100 km. Some of the manufacturers said complying with this norm is slightly complex as batteries are imported and specifications cannot be altered.

Further, the government has mandated 50% localisation of content in vehicles to avail of the benefits under the scheme, which manufacturers said is difficult to maintain as companies have to import several components, in addition to lithium-ion batteries and electric motors used in vehicles. The FAME II starting April 1 and spanning three years will support 35,000 electric four-wheelers, 20,000 hybrid vehicles and 10 lakh two-wheelers.

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