According to senior industry executives, globally, subsidies on EVs are mostly given based on their performance, irrespective of the size of the lithium-ion batteries
New Delhi: Indian automobile makers want the government to decide the subsidies on electric vehicles (EVs) based on the number of kilometres they can run on a single charge and their top speed, among parameters to be certified by central agencies such as the Automotive Research Association of India (Arai).
As per the draft of the second stage of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) scheme in India, the department of heavy industries has offered subsidies based on the size of the lithium-ion batteries fitted in the vehicles.
However, according to three senior industry executives, who wanted to remain anonymous, globally, subsidies on electric vehicles are mostly given based on their performance, irrespective of the size of the lithium-ion batteries.
“At present, in India there is a range anxiety among customers of electric vehicles since the vehicles available cannot run at a desired pace and cover much distance on a single charge. Hence, it is logical to give subsidies based on the performance of the vehicles, otherwise the range anxiety issue will remain," said the first of the three senior executives.
In the draft note, the ministry has proposed a subsidy of ₹ 12,000 for a two-wheeler fitted with a lithium-ion battery of 1.2 kilowatt hour (kWh) while the highest subsidy has been given to a battery pack with a capacity of 5.2 kWh, also for two-wheelers. The subsidy in the case of electric cars and other vehicles are also decided in the same way.
According to the second of the three executive cited earlier, the battery packs used by the different vehicle manufacturers are not certified by any of the central agencies such as the Automotive Research Association of India.
At the same time, speed and range are tested and certified by different agencies and as the range anxiety reduces—the ability of a vehicle to cover more distance on a single charge—customers will have more trust in these vehicles.
On 27 June, Mint reported that government employees did not want to use electric vehicles supplied by Tata Motors Ltd and Mahindra and Mahindra Ltd (M&M) to the government-owned Energy Efficiency Services Ltd because they did not cover the desired range on a single charge. Hence automobile companies think it would be better if the government offered subsidies based on certified range and speed.
The third executive is of the opinion the consumer should always be kept in mind while deciding the factors that will determine the subsidy.
“Today, the customers are concerned about the range of the electric vehicles. Can the problem be resolved by giving subsidy on different batteries? Then it’s always better if a customer while buying the vehicle knows the speed and distance the vehicle can cover on a single charge and the subsidy that will come with it," said the executive.
Some automobile manufacturers have already highlighted this issue to the ministry of heavy industries and will also call on senior officials of the government think tank NITI Aayog this week, through industry lobbies like the Society for Manufacturers of Electric Vehicles (SMEV).
According to a letter written by SMEV to the Prime Minister’s Office on 5 July, the lobby has pointed to this alleged gap in the draft FAME policy.
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