For the uninitiated, an electric car is just a car propelled by one or more electric motors using energy stored in rechargeable batteries, instead of burning petrol or diesel internally and exhausting fumes. There are broadly three kinds of electric cars at present:

  1. Solar-powered electric cars and vehicles
  2. Hybrid electric cars powered by a mix of internal combustion and
    batteries
  3. Electric cars with on-board battery packs also known as battery electric
    vehicle (BEV)

More often than not, electric cars in the context of mobility and environmental
conservation refer to battery electric vehicles, but may also refer to plug-in
hybrid electric vehicles (PHEV)

 

Background:

  • FAME (Faster Adoption and Manufacturing of Hybrid and EV ) India is a part
    of the National Electric Mobility Mission Plan. Main thrust of FAME is to
    encourage electric vehicles by providing subsidies.
  • The FAME India Scheme is aimed at incentivising all vehicle segments.
    ● Two phases of the scheme:

○  Phase I: started in 2015 and was completed on 31st March,
2019

○  Phase II: started from April, 2019, will be completed by 31st
March, 2022

  • The scheme covers Hybrid & Electric technologies like Mild Hybrid, Strong
    Hybrid, Plug in Hybrid & Battery Electric Vehicles. 
  • Fame India Scheme has four focus Areas:

○  Technology development

○  Demand Creation

○  Pilot Projects

○  Charging Infrastructure

●  Objectives of FAME Scheme:

○  Encourage faster adoption of electric and hybrid vehicles by way of offering upfront Incentive on purchase of Electric vehicles.

               ○  Establish a necessary charging Infrastructure for electric vehicles.
○  To address the issue of environmental pollution and fuel security.

●  Salient Features of Phase II:

○  The outlay of  ₹10,000 crore has been made for three years till 2022 for FAME 2 scheme. The centre has sanctioned  ₹8,596 crore for incentives, of which  ₹1,000 crore has been earmarked for setting up charging stations for electric vehicles in India.

○  Emphasis on electrification of the public transportation that includes
shared transport.

○  This phase aims to support, through subsidies, approximately 7000
e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars and 10 lakh e-2 Wheelers.

○  In 3-Wheel (W) and 4-Wheel (W) segment incentives will be applicable
mainly to vehicles used for public transport or registered for
     commercial purposes.

○  In the 2-Wheel (W) segment, the focus will be on the private vehicles.

○  To encourage advanced technologies, the benefits of incentives will be
extended to only those vehicles which are fitted with advanced
batteries like a Lithium Ion battery and other new technology
     batteries.

○  The scheme proposes for establishment of charging infrastructure,
whereby about 2700 charging stations will be established in metros,
other million plus cities, smart cities and cities of Hilly states across
the country so that there will be availability of at least one charging
station in a grid of 3 km x 3 km.

○  Establishment of Charging stations are also proposed on major
     highways connecting major city clusters.

■  On such highways, charging stations will be established on
both sides of the road at an interval of about 25 km each.

Benefits of Electric Vehicles:

Cost Effective: With advent of advance technology and dedicated R&D, both cost and maintenance of electric vehicles has gone down. Government is incentivizing the use of Electric Vehicles by providing subsidies and lower motor taxes on EVs.

Environment Friendly: Electric Vehicles are 100 percent eco-friendly. They do not emit toxic gases or smoke in the environment which leads to global warming and helps to reduce pollution.

Energy Security: As electricity is majorly produced from either renewable sources or from sources that emit no greenhouse gases thus EVs help in maintain energy security by
shifting dependence from non- renewable resources to renewable resources.

Less Maintenance: Electric vehicles require less maintenance than conventional vehicles as there are fewer fluids (like oil and transmission fluid) to change and fewer moving parts.

Reduction in Noise pollution: Electric vehicles are quieter to operate than gasoline-powered vehicles, leading to reduction in noise pollution.

Challenges In Consumer Adoption Of Electric Cars

Breaking away the old norms and establishing a new consumer behaviour is always a challenge. It is common to find users anxious about the speed and range of EVs. Thus, a lot of sensitization and education is needed, in order to bust several myths and promote EVs within the Indian market

Apart from this, there are a number of challenges in the adoption of electric vehicle cars in India in the near future. These include:

  1. Inadequate charging infrastructure
  2. Reliance on battery imports
  3. Reliance on imported components and parts
  4. Incentives linked to local manufacturing
  5. Range anxiety among consumers
  6. High price of EVs currently
  7. Lack of options for high-performance EVs
  8. Inadequate electricity supply in parts of India
  9. Lack of quality maintenance and repair options
  10. Affected by broader automobile industry downturn

In the recent budget, tariff on import of auto parts has been increased, which would be bad for the promotion of EV.

Three stocks that may benefit from India’s
electric vehicle push

  1. Maruti Suzuki

The company has a wide reach in Indian markets and is one the most trusted by Indian car owners.

  1. Amar Raja Batteries

As the main component of the electric vehicles is battery, India's second-biggest traditional battery maker Amara Raja is looking to build a Lithium-ion assembly plant soon. The firm is already working in collaboration with different state governments to promote the use of electric vehicles. They have collaborated with Delhi government to set up charging station.

  1. Minda Industries

World’s best performing Indian auto parts maker Minda Industries will get a boost from the electric vehicle market. The company is in touch with original equipment manufacturers for possible EV-compatible systems and is evaluating existing products
to see how they will fit into the market. The company has already increased the
R&D costs to enter the electric vehicle segment to capitalize on the opportunity.

India to launch Hydrogen Energy Mission

Union Minister for Finance Nirmala Sitharaman announced that the Hydrogen Energy Mission will be launched in 2021-22, during her budget speech February 1, 2021.

“Prime Minister Narendra Modi, while speaking at the Third Re-inVest Conference in November 2020, had announced plans to launch a comprehensive National Hydrogen Energy Mission. It is now proposed to launch a Hydrogen Energy Mission in 2021-22 for generating hydrogen from green power sources,” Sitharaman said.

“Green Hydrogen Mission is not only essential to decarbonise heavy industries like steel and cement, it also holds the key to clean electric mobility that doesn’t depend on rare minerals,” Ulka Kelkar, director, Climate, World Resources Institute, India, told Down To Earth.

“Hydrogen can be generated from many sources. But what the minister talked about was the hydrogen sources from renewable sources
Focussing on the production of green hydrogen in India would mean significantly ramping up the current renewable energy infrastructure across the country, according to experts.

However, green hydrogen energy technologies come with their own problems.

“In terms of reaching commercial viability, there are a range of demonstration and real-world live applications currently operating across the world,”

DELHI”S INITIATIVE (SWITCH DELHI CAMPAIGN)

Chief Minister Arvind Kejriwal on February 4 launched the ‘Switch Delhi’ campaign and said his government will ensure that within the next six months, only electric vehicles are hired by different departments.

Under the campaign, awareness will be created about the benefits of electric
vehicles and how it can contribute to making Delhi clean and pollution-free, he
said.

Electric vehicle makers on Friday termed the ‘Delhi Electric Vehicle Policy‘ as a step
in the right direction to encourage adoption of clean energy vehicles in the capital and said it will set an example for other states to follow.

Chief Minister Arvind Kejriwal on Friday launched the ‘Delhi Electric Vehicle Policy’
under which his government will waive registration fee and road tax, and provide
incentive of up to ₹1.5 lakh for new electric cars in the national capital. Incentives of
up to ₹3 lakh are provided under Delhi EV policy, which includes 1.5 lakh subsidy,
registration, and road tax exemption. This is the highest subsidy in India and makes the
total cost of ownership of an electric car in Delhi the same as a diesel car.

Under the policy, the Delhi government will give incentive of up to  ₹30,000 for electric two-wheelers, autos, e-rickshaws and freight vehicles.

According to the Society of Manufacturers of Electric Vehicles (SMEV), this policy will provide more push to the existing EV architecture than the current FAME II scheme by the Centre.

Karnataka is the first state to unveil an electric vehicles policy, hoping to generate investments of Rs 31,000 crore in EV R&D and manufacturing.

Since then, 11 states including Gujarat, Delhi, Maharashtra, Tamil Nadu, Telangana and Andhra Pradesh have brought out their own EV policies. Bengaluru is also home to promising EV startups in the country such as Ola Electric, Sun Mobility and Ather Energy. Ola signed a deal to set up its scooter making facility in Tamil Nadu recently.

Despite the hype, Tesla’s foray into India may well prove challenging. The country hasn’t yet rolled out the welcome mat for EVs like neighbor China, where Tesla set up its first factory outside of the U.S. and now dominates sales of premium EVs.

EVs account for about 5% of China’s annual car sales, according to BloombergNEF, compared to less than 1% in India. By 2030, the government aims to make India a 100-per cent electric-vehicle nation.

According to the International Energy Agency, around 60% of the world’s public
slow- and fast-charging spots are in China. As Chinese carmakers roll out
competitive EV models and develop a diverse ecosystem, the country is “heading toward disrupting the current global auto industry landscape,” UBS Group AG analysts wrote in a report last month.

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