ELECTRIC VEHICLES

Team Members
GENERAL POLICY FRAMEWORK

April 13, 2019 2

COVERAGE

PRESENT SCENARIO OF TRANSPORT AND CHALLENGES

Energy security Environment

ELECTRIC VEHICLE AS A SOLUTION

Benefits Details

INITIATIVES TAKEN BY GOVERNMENT OF INDIA

NEMMP, FAME-I Strategy and implication

NEW EV POLICY – SEPTEMBER 2018

Salient points and thrust areas Strategy and implication

SUGGESTIONS

April 13, 2019 3

PRESENT SCENERIO
Historically, mobility and fossil fuels have been inextricably linked. However, over the last
decade, a collection of circumstances have created an opening for electric mobility to enter
the mass market. The two main forces are:
Energy security: The petrol, diesel and CNG needed to fuel an internal combustion engine
(ICE) based mobility system requires an extensive costly supply chain that is prone to
disruption from weather, geopolitical events and other factors.

India needs to import oil to cover over 80 percent of transport fuel. The import bill of crude oil
is estimated to increase by 42 per cent from $88 billion in 2017-18 to $125 billion in 2018-19.
Further advances in RE technologies have drastically reduced cost and introduced clean,
low-carbon and inexpensive grids. India to add 175 GW of RE capacity by 2020

OIL IMPORT - FY 2006-2019 – Amount in MT, Crores, Rupees

864,875 881,282
900000 Indian basket crude oil price of $77.88/bbl and 784,652
800000 $/Rs exchange rate of 72.22
672,220 687,416
700000 PPAC – Oil Min. Oct’18
566,450
600000
455,276 470,251
500000 416,579
348,304 375,277
400000
272,699
300000 219,029
171,702
200000
100000 99.4 111.5 121.67 132.77 159.25 163.59 171.72 184.79 189.23 189.43 202.85 213.93 220.4 228.6
0
FY 6 FY 7 FY 8 FY 9 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19

April 13, 2019 4

PRESENT SCENERIO
Rapid urbanization and pollution : Economic development is leading to urbanization as
rural populations move to cities. It also stresses upon the energy and transport infrastructure
leading to congestion and pollution. According to a recent study by WHO, India is home to 14
out of 20 most polluted cities in the world. Further the prospect of rapid global temperature
increase has created the need for a reduction in the use of fossil fuels and the associated
emissions. India has committed to cutting its GHG emissions intensity by 33% to 35%
percent below 2005 levels by 2030.

While vehicle growth in India is rapid, ownership per 1000 population has increased from 53 in
2001 to 167 in 2015, a key difference between India and other countries and the types of vehicles
being used

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SOLUTION – ELECTRIC VEHICLES : WHY ?

Fuel saving : Over 1.65 crores liter of fuel will be

saved every year with 10000 e-cars.

A typical ICE based passenger vehicle emits about

4.6 metric tons of carbon dioxide per year

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SOLUTION – ELECTRIC VEHICLES : WHY ?
1. Higher efficiency of fuel conversion – 0.4X0.8=0.32 vs 0.20 for an IC engine based vehicle
2. Running cost is less because of cost of charging and replacement of batteries only
3. Reduced TCO taking into account lower variable cost offsetting relatively higher fixed cost
4. Better utilization of assets with digital technology, GPS, data capture and analysis
5. Advances in technology- higher energy density, faster charging and less battery degradation
6. A relative abundance of exploitable renewable energy resources shall reduced variable cost

As a result, developed economies such as EU, the USA and Japan as well as developing
economies such as China and India have all included EVs in their policies to lower their carbon
emissions while providing convenient and cost-effective mobility.

April 13, 2019 7

INITIATIVES TAKEN BY GOVERNMENT
Government launched the National Electric mobility mission plan (NEMMP) 2020 in 2013
National Electric mobility mission plan (NEMMP) 2020
The mission seeks to attain national fuel security through promotion of sale of hybrid and
1
electric vehicles in the nation
To provide a clean and gasoline free transportation option to the people in a significant
2
manner become a reality. Also help in reduce GHG
3 Has a target of attaining 6-7 million electric or hybrid vehicle population by 2020
To attain certain level of indigenization of technology ensuring India’s global leadership in
4
some vehicle segments
5 Demand side incentives to facilitate acquisition of hybrid or electric vehicles
Promoting R&D in technology including battery, power electronics, motors, systems
6
integration, BMS, testing infrastructure, and ensuring industry participation
7 Promoting charging infrastructure
8 Supply side incentives
9 Encouraging retro-fitment of on-road vehicles with hybrid kit
The 2020 roadmap estimates a cumulative outlay of about Rs.14000 cr. during the span
10
of the scheme, including industry contribution.
Envisages a total fuel saving of 9500 million liters by 2020 amounting to around INR
11
62,000 crores
April 13, 2019 8
INITIATIVES TAKEN BY GOVERNMENT
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme

The FAME scheme was launched under NEMMP 2020 in the Union Budget for 2015-16
1 with an initial outlay of INR 75 crore

2 It encourages buyers to purchase electric vehicles over the traditional fuel based cars

The Government shall reimburse the automakers the discount that the auto makers will
3 pass on to the customers

It involves the provision of INR 795 crore (extended to 895 crore) support till the year
4 2020 for the manufacture as well as sale of electric and hybrid vehicles

Focus is to develop indigenous technology and R&D capability to develop and

5 manufacture components and systems for these hybrid vehicles in India

It also seeks for development of technology, demand creation, pilot projects and
6 enhancement of charging infrastructure

This scheme involves provision of demand incentives to electric as well as hybrid

7 vehicles ranging from buses to two wheelers in cost bracket of INR 1800 to 66 lakh

8 The nodal department for this scheme is the Department of Heavy Industries

April 13, 2019 9

INITIATIVES TAKEN BY GOVERNMENT
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme
Incentive for different classes of vehicles
Type of Vehicle Minimum (Rs) Maximum (Rs)
1
Scooter (2W) 1800 22000
Motorcycle 3,500 29,000
Auto rickshaw (3W) 3,300 61,000
Cars (4 W) 11,000 1,38,000
LCVs 17,000 1,87,000
Bus 30,00,000 66,00,000
Retro fitment category 15% or 30,000 if reduction in fuel consumption is 10-30%

30% or 90,000 if reduction in fuel consumption is more than 30 %

2 Around 42000 electric vehicles sold in 2012-2013, 20000 in 13-14 and 22000 in 14-15

3 During 2012-2013, major percentage of electric vehicles were electric low speed scooters

4 This scheme envisages boosting momentum for hybrid and electric vehicles under all
vehicular segments including 2W, 3W, 4W, LCV and Buses
5 There was a phase wise implementation of the scheme with fund allocation of INR 260
crore and 535 crore for the first 2 years

April 13, 2019 10

FAME-I – ACHIEMENTS AND LIMITATIONS
FAME-I was successful to promote the use of electric buses in India. The scheme has
1
been extended four times and is valid till March 2019
Length agnostic subsidy resulted in STU preference for 9m buses. The subsidy was
2 based on the localization components, rather than on the bus size. The government
should encourage procurement of 12m buses also as they can be used on truck routes.
DHI issued EoI for proposals from million-plus cities and special category states for
multi-modal transport in Oct 2017. 44 cities submitted 47 proposals, of which 11 cities
3 were selected for pilot project for multi-modal electric public transport. 10 cities (except
Delhi) floated the tenders and 8 cities (excluding Ahmedabad and Jaipur) managed to
finalize the tendering process before 31 March 2018
DHI received proposal from 44 cities across 21 states for 3,144 buses, 2,430 e-four-
4
wheeler taxis and 21,545 e-three wheeler autos for support of Rs 4,054.6 crore
11 cities selected were Delhi, Ahmedabad, Bengaluru, Jaipur, Mumbai, Lucknow,
5
Hyderabad, Indore, Kolkata, Jammu and Guwahati.
DHI have now discontinued incentive available to 1) Conventional Battery Vehicles 2)
6
Vehicles not requiring registrations like battery 2W etc. 3) Mild version of Hybrid
7 Lack of infrastructure for electric vehicle charging, longer charging time than fueling
8 Most of the cities are procuring or renting the buses without detailed operation plan
Timely execution is essential given only two bidders has won all the tenders and will
9
have advantaged position compared to other players
FAME-I – ACHIEMENTS AND LIMITATIONS
10 High price of electric vehicle (1.5 times) because of battery, limited range of 150 km
As the incentive was on vehicles that the government the manufacturer could afford to raise the price
11
of the vehicle and then sell and also take the incentive
12 Constraints in putting up fast charging outlets – transmission and distribution upgrade
Money needed for upgrading distribution network from home (6kW), commercial (30 kW) to super
13
chargers (100-150kW)
14 Battery pack needing replacement after 06 years
Many cities like Bangalore (500 buses), Delhi (1000 buses) and UP (570 buses) have gone for large
15
scale procurement of e-buses outside FAME
There is huge variation in tender conditions in different cities which results into big variation in
16
price for both GCC and outright purchase contract.
While the policy did succeed in pushing both end-users and manufacturers towards the e-mobility
regime, one of the key misses was rollout of the policy ahead of the government addressing
17 fundamental issues such as standardization of protocol for charging infrastructure, or push towards
regional transport utilities and shared mobility
Bid Price in Different Cities – INR PER KM Bid Price in Different Cities – INR MILLION PER BUS)
Phase-II of FAME
1 Objective is to minimize carbon footprint, maximize public welfare, and generate
maximum jobs and growth

2 Priority support for public transportation, shared mobility, and smaller electric vehicles
like two-wheelers. In FAME-II, incentives to private purchases will get slightly curtailed
or totally pruned
3 As per a report from NITI Aayog, EVs can cut India’s energy demand by 64 per cent and
carbon emissions by 37 per cent by 2030.

4 The auto industry is riddled with apprehensions and doubts over the long-term roadmap
that the government is yet to prepare

5 The industry fears that lack of charging infrastructure and a robust ecosystem are the
biggest stumbling blocks to ensuring EVs techno-commercial feasibility.

6 The anxiety has grown since February 15, after transport minister dismissed the need
for a policy on EV (and any fiscal incentives to manufacturers) and instead supported an
‘action plan’ to encourage the manufacture and use of EVs.

7 low average vehicle (petrol/diesel) prices will inhibit EV uptake for the next 10 years
8 After 2030, EV sales in India to accelerate with increased affordability, as well as the
government’s efforts to ensure universal access to electricity to lower challenges with
charging infrastructure.

9 Encourage their adoption by way of market creation and demand aggregation.

Phase-II of FAME
1 Rs 5,500 crore second lap of the Faster Adoption and Manufacturing of Hybrid and
Electric Vehicles (FAME) scheme before March 31 this year
2 New policy applicable for five years
4 Installing 300 electric vehicle charging stations along highways by the end of 2019. The
Delhi-Jaipur-Agra highway triangle and the Mumbai-Pune highway have been identified
as initial recipients

5 Lead-acid batteries are done away with, we have moved to advanced batteries.

6 Focus on electrification of buses based - unmet demand of many states under FAME-I
7 Reducing customs duty on parts of electric vehicles which are currently not exempted
from import tariff
8 With an aim to boost production of electric vehicles (EVs) in the country, the ministry
has also suggested defining semi knocked down and completely knocked down kits
used for assembling EVs for streamlining of customs duty.

9 At present, key components for EVs, including battery, controller, charger, converter,
energy monitor, electric compressor and motor, attract zero customs duty. On the other
hand, parts including metals and plastics attract 28 percent basic customs duty.

10 The tax structure entailing a one-year sunset clause was proposed by the Heavy
Industries Ministry
Phase-II of FAME

11 The policy to boost EV adoption in the country will also entail a long-term road-map and
vision to encourage domestic manufacturing of lithium-ion batteries.

12 No support for battery swapping wing to fears of dumping of batteries from China and
the high cost of establishing battery swapping infrastructure. no proper mechanism for
their disposal.
13 Emphasized incentives for domestic manufacturing of lithium-ion batteries as they are
mostly imported from China
14 The duty on import of Li-ion battery is only going to increase so we are not going to
encourage their imports
15 Reduction in the SKD and CKD rates for electric vehicles

16 Promotion of local manufacturing of electric vehicles under the Make in India

programme

17 Energy Efficiency Services (EESL), responsible for procuring EVs for the government,
has already tendered for 10,000 EVs from Tata Tigor and Mahindra e-Verito, to kickstart
the replacement of the existing fleet of petrol and diesel vehicles. There are over 5 lakh
such vehicles which EESL intends to replace over the next three to four years, which will
lead to fuel savings of about 8,000 million litres and 10 million tons of carbon reduction.
WHERE WE STAND
SUGGESTIONS
1 Additional government incentives including lower GST rate
2 Sizable income tax benefits
3 waiver on road tax and toll charges
4 Free parking for EV, High parking changes for petrol and diesel cars
5 50 per cent reduction in power tariff for charging electric vehicles
6 Electric home charging schemes
7 Currently states like Goa and Maharashtra are offering registration fee waiver for BEV.
8 Incentive for swapping diesel vehicles with electric vehicles

9 US offers Plug-In Electric Drive Vehicle Credit

10 Restricting new fossil fuel based vehicle registration

11 Encourage Taxi aggregators
12 Development of transmission and distribution network
13 Conversion of existing petrol pumps to charging stations in association with oil sector
14 Government can give benefits to the end consumer in the form of scrappage schemes
15 minimize the consumption of petrol and diesel
16 Unless we get large volumes, the component manufacturers will not find it commercially
viable to localize the components for EVs
 THANK YOU

April 13, 2019 19