Government, Carmakers Agree to End EV Subsidy After Existing Regime

End of EV Subsidies: Commerce and Industry Minister Piyush Goyal on Friday said the electric vehicle (EV) companies present in the meeting have unanimously agreed that they would no longer need subsidies once the existing subsidy regime ends.

Stakeholders from the EV sector held deliberations with the minister here on issues pertaining to development of battery charging and swapping infrastructure.

The minister also said that companies are free to choose their own business models.

Whether they prefer to collaborate and share resources for battery swapping or sell vehicles with their own batteries, the decision is entirely up to them, he said.

"Everybody was unanimous in the room that once the existing subsidy regime comes to an end, none of them requires the subsidy to grow further...Each sector has one or the other model which makes it self-sustaining and does not call for further subsidies," Goyal told reporters when asked about the views of companies on subsidies.

In a bid to woo global EV makers into the country, in March last year the government rolled out an electric vehicle policy, under which duty concessions were offered to companies setting up manufacturing units in the country with a minimum investment of USD 500 million.

The government has plans to install 10,763 public charging stations across the country under the FAME-II scheme.

Under FAME-India Scheme phase-II, incentives are provided to buyers of electric vehicles in the form of an upfront reduction in the purchase price of electric vehicles.

There is another scheme - PM E-DRIVE - to support electric mobility through support for 14,028 e-buses, 2,05,392 electric three-wheelers (L5), 1,10,596 e-rickshaws and e-carts and 24,79,120 electric two-wheelers.

In addition, e-trucks, e-ambulances, EV public charging stations and upgrading of testing agencies are also supported under the scheme.

The government has also rolled out the production linked incentive (PLI) schemes for auto sector and manufacturing of Advanced Chemistry Cell (ACC).

Electric vehicles are covered under PLI scheme for automobile and auto components, which was approved in 2021 with a budgetary outlay of Rs 25,938 crore for a period of five years.

Goyal said that awareness is increasing among people about cost benefits of using EVs.

"The electric mobility today is absolutely ready and set to fly. They do not need newer incentives or subsidies, the existing subsidies are available for some more time and will help them give that appropriate kick start to the EV ecosystem...There are options and ideas available by which electric mobility can be successfully marketed," he said.

When asked about their discussions on battery charging infrastructure, he said Petroleum and Explosive Safety Organization (PESO) has released draft guidelines for installation of multiple EV charging/battery swapping facilities at petrol pumps.

The idea is to make it easier for setting up charging infrastructure at petrol pumps or gas stations.

The ministry has suggested to make those guidelines self-monitored and self-certified so that whoever is setting up the charging station will self-regulate those.

"Similarly, we want to encourage resident welfare associations, commercial establishments, office complexes to have electric charging equipment. Charging, swapping or auto companies are ready to do the investments," Goyal said.

The ministry also suggested the industry body of the sector to run a campaign to increase awareness about benefits of EVs.

Besides, he said, they can consider developing a common app or tool through which people will know the nearest charging stations and other information required for growth of the sector.

"Another area we focused was on safety standards," he added.

The BIS (Bureau of Indian Standards) has already notified standards for three- and four-wheelers and now they will notify the same for two-wheelers.

The BIS has released the draft standards for two-wheelers and the minister asked the firms to submit their comments by January 6.

Standards will keep evolving because this industry has a lot of innovation and R&D, he said.

When asked if the government has encouraged them for battery swapping, the minister said, "I think it's a business case that should be left to consumers. It's the choice of the consumers. Smart consumers will make smart choices."

"Again we have left it for companies to decide their own business model. So if companies want to go along with swapping, they can pool their resources, if they want to seal their own vehicle with their own battery (it's up to them)," he said.

Each company will have to choose its own path and different companies have different levels of R&D and innovation, he added.

"Some may not want to share their offerings with other companies, some may want to pool resources with others and leverage benefits...So we believe that it's not the government's job to micro-manage. The government has already played the role of facilitator," he noted.

Officials from department of heavy industries, power, Niti Aayog, BIS, DPIIT (Department of Heavy Industries, and Department for Promotion of Industry and Internal Trade (DPIIT), were present in the meeting.

"So everybody was on the same page that this industry should be allowed to flourish and fly and the best way is to leave them to decide their own fate," Goyal said.

Startups, auto companies, two-, three-, and four-wheelers, passenger cars, trucks, buses, battery swapping companies were also there. Representatives from Tata, TVS and Mercedes-Benz India participated in the deliberations.

As per industry estimates, the total EV sales in India stood at around 10 lakh units in 2022.

In India, Tata Motors is the leading player in passenger electric vehicles. The company's current EV portfolio comprises Nexon EV range, Tiago EV and Tigor EV.

Also Read: Piyush Goyal Holds Meeting With Carmakers To Discuss EV Battery Charging, Swapping Infrastructure