EV Makers Applaud PM's New E-Drive Scheme for Electric Mobility

On September 11, the Union Cabinet approved the PM E-Drive Scheme with an outlay of ₹10,900 crore, a move that has been welcomed by electric vehicle (EV) manufacturers. The new scheme is designed to promote electric mobility in India by incentivizing the adoption of electric vehicles and supporting the development of charging infrastructure nationwide.

Key Highlights of the PM E-Drive Scheme

The PM E-Drive Scheme aims to accelerate EV adoption in India by offering subsidies worth ₹3,679 crore to encourage the purchase of electric two-wheelers (e-2Ws), three-wheelers (e-3Ws), e-ambulances, e-trucks, and e-buses. The scheme plans to support the purchase of 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses over a period of three years. Additionally, ₹500 crore has been allocated for the promotion of e-ambulances, aimed at providing comfortable patient transport.

The scheme also focuses on building a robust charging infrastructure across the country, with plans to set up 1,800 fast chargers for e-buses and 48,000 fast chargers for e-2Ws and e-3Ws. This is expected to help address "range anxiety" among EV buyers and promote the widespread use of electric vehicles.

Industry Reactions

Leading EV manufacturers have expressed their enthusiasm for the new scheme. Bhavish Aggarwal, CEO of Ola Electric, commented, "The PM E-Drive scheme is a welcome move and a great step to accelerate EV adoption in India." Vinod Aggarwal, CEO of VE Commercial Vehicles, echoed this sentiment, stating that the scheme would provide much-needed impetus to the EV industry, allowing it to scale and mature.

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The scheme has been particularly well-received following the government's decision not to extend the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-II) scheme, which expired on March 31, 2024. The new PM E-Drive Scheme effectively replaces the existing FAME-II subsidies, which had been reduced earlier from ₹15,000 per kWh to ₹10,000 per kWh.

Impact on the Electric Vehicle Market

Since the reduction of FAME-II subsidies in June 2024, the sales of electric two-wheelers (E2Ws) saw a significant drop, with customer prices increasing by ₹20,434 to ₹30,285. However, with the introduction of the new PM E-Drive Scheme, EV sales have started to recover, bouncing back to 88,473 units as of August 2024.

The EV industry believes that the new scheme's focus on subsidies and infrastructure will further boost consumer confidence and help maintain the growth momentum in the sector. However, some industry players have pointed out the need for additional provisions, such as battery swapping, to be included in the scheme to fully support the diverse needs of the market.

Government's Commitment to Sustainable Mobility

The PM E-Drive Scheme underscores the government's commitment to promoting sustainable mobility solutions and reducing environmental pollution. It builds on the foundation laid by the FAME scheme, which was designed to address environmental concerns and encourage the use of eco-friendly vehicles in India.

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The scheme is expected to play a crucial role in India's transition towards a greener and more sustainable transportation system, contributing to broader initiatives aimed at mitigating pollution and reducing the country's carbon footprint.