Industry body IEMC on Thursday called for continued incentives for the electric vehicle industry, warning that scrapping standards would reduce EV sales to 37 million by 2030 from an estimated 125 million.
The Indian Energy Storage Alliance (IESA) expects electric vehicle (EV) sales in India to fall to 37 million units by 2030 from an estimated 125 million units if demand incentives are removed, according to the Indian Electric Vehicle Council (IEMC).
The central government launched the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme in 2015, under which subsidies are provided to EV manufacturers and the benefits are passed on to buyers. The second phase of the FAME II program launched in 2019.
The scheme, which also provides incentives for setting up battery charging stations in the country, is expected to end in March next year.
“…To ensure sustained growth in EV adoption in India, over 80 EV companies have gathered in New Delhi to propose a comprehensive reconsideration of the demand and supply drivers affecting the EV industry post-FAME II,” IEMC said in a statement.
IEMC also expressed concern over the government’s move to reduce subsidies for electric two-wheelers under FAME II. 15,000 per kWh for 10,000 units and said that electric two-wheeler sales have dropped by more than 50% as a result.
The report said that the electric vehicle industry sold 1,05,299 electric two-wheelers in May and only 46,003 two-wheelers were sold in the following month.
The report noted that July sales improved slightly to 54,176 units, but were still about half of the industry’s sales in May.
“These data demonstrate the EV industry’s reliance on on-demand subsidies as subsidies have been a key driver of the EV ecosystem,” it said.
According to IESA’s analysis, it is expected that by 2030, with strong government support, the compound average growth rate of the Indian electric vehicle industry will reach 49%.
The report added that in the best-case scenario with demand-side incentives (such as the FAME scheme), EV sales are expected to be 125 million units in 2030, while in the worst-case scenario without demand incentives, this could drop to 37 million units by 2030.
Industry stakeholders also recommended that the commercial truck and fleet moving segments be considered, taking into account the distance traveled by these categories, the volume of cargo transported, and the potential fuel savings and CO2 emissions.
Sectors such as construction equipment and tractors also need to be taken into consideration to spark industry interest and encourage leading players to develop ‘Make in India’ solutions for this high-potential sector, they said.
Rahul Walawalkar, president of IESA and chairman of IEMC, said: “The need of the hour is to comprehensively consider all demand and supply-related drivers of the growth of the electric vehicle market in India. Drawing on the experience of markets that are already leading in electric vehicle adoption, similar holistic strategies have been adopted to decarbonize the transportation sector. “A lot more needs to be done beyond subsidies or incentives. He added that the purpose of the forum is to gather input from across the industry and present it to the appropriate government agencies in a well-structured manner.
Sudhendu J Sinha, Consultant (Infrastructure Connectivity-Transportation and Electric Mobility), NITI Aayog, also asked stakeholders to think disruptively, think about new segments and other enablers and provide suggestions that can help provide end-to-end solutions.
IEMC members include participants from automotive manufacturing, components, research and development, charging, battery replacement, testing and safety standards.
Earlier this month, IEMC organized an industry dialogue among policymakers and stakeholders, including players in the electric two-wheeler (e2W), e3W, e4W, e-buses, trucks, farm needs, construction equipment, EV charging and battery swapping industries.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
