As challenges mount, centre sets modest target for EV sales

NEWDELHI: The Union government has set a target of increasing the number of electric cars to 4% of the overall new vehicle sales in the next five years starting from 2018-19.

The target, which takes into consideration the impediments on the road to successful adoption of electric mobility, has been set for the next stage of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, according to the documents sent by the department of heavy industries (DHI) to the executive finance committee (EFC), which have been reviewed by Mint.

In the National Electric Mobility Mission Plan (NEMMP) unveiled in 2013 by then prime minister Manmohan Singh, the target was to achieve sales of 5-6 million electric and hybrid vehicles by 2020 which is much higher than the current number of these vehicles and the target being set by the government in the FAME scheme.

“The Union government has now realized that it will not be easy to adopt electric mobility or any other form of future technology unless we have the proper infrastructure for it. There are also other challenges such as that regarding development of local manufacturing of components which will take some time. As of now we are way behind the target set by NEMMP,” said a person directly aware of the development.According to the documents, DHI has estimated that ₹9,381 crore will need to be spent in the next five fiscal years to 2022-2023.

In the first year, the funds required will be ₹629 crore, while in the subsequent years it will ₹1,215 crore, ₹2,304 crore, ₹2,604 crore, and ₹2,629 crore. DHI also wants to earmark ₹1,000 crore for promoting the manufacture of electric vehicle components, ₹5,250 crore for demand incentives and ₹1,000 crore for setting up charging infrastructure in the next five years.

FAME, launched in fiscal 2015, was meant to run for two years until March 2017. The scheme was extended twice till March 2018.

In April, the Union government decided to extend the FAME scheme by six months until September 30, 2018, or till the time the second phase of the scheme is approved by it. “We will get the scheme approved by September and are hopeful that there will be no further extension,” said a senior official of DHI.