Despite the Indian automotive industry experiencing a sharp decline in FY19, the EV market is expected to continue to grow in the coming years. With the BS-VI (emission) norms becoming applicable from April 2020, EVs will become more price-competitive with conventionally fuelled vehicles, thus accelerating sales.
December 31, 2019. By Darshana Daga
With a mix of ups and downs, the year 2019, was an eventful year for the electric vehicle (EV). With the entry of more electric cars and Chinese entities’ entry, bringing down the average cost, the coming year is expected to be better.
Faster Adoption and Manufacturing for Hybrid and Electric vehicles (FAME II), offers higher incentives to higher powered products. It excludes lead acid battery-powered two-wheelers and mandates that e-scooters should have 80 km per charge and a minimum top speed of 40 kmph, with at least 50 per cent localisation in manufacturing. This has left a large share of two-wheelers out of the incentive, says CRISIL Research.
Recently, Union minister Prakash Javadekar told Parliament that a subsidy of Rs 360 crore under FAME, was given as support to 285,000 buyers of electric/hybrid vehicles.
The number of electric two-wheelers sold under FAME in the first six months of this financial year (April to September) saw a 94 per cent decline to around 3,000 units, from 48,671 units in the same period last year. The number sold without FAME incentive in the period went up to around 49,000 units, 2019, from around 10,000 during the same period last year, said SMEV.
The number of electric cars within the FAME scheme of under Rs 15 lakh cap sold during April to September came down to almost 50 ppercent to 340. They do not include the numbers of Hyundai's Kona, launched in July, according to the Society. Only around 1,500 electric cars for personal use have been sold so far during the financial year, according to the report.
Entry of leading players into the EV business, state governments announcing policies and customers becoming more aware of the benefits of such vehicles, are some of the positive developments.
The goods and services tax (GST) for EVs was cut from 12 per cent to five per cent in July. The GST rate on charger or charging stations for EVs was also reduced from 18 per cent to 5 per cent.
In the two-wheeler category, there was entry of Bajaj, TVS and Revolt in the market. Authentic players in the three-wheeler segment might partner with municipal bodies, battery manufacturers or fleet operators.
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