Helping in the adoption of electric vehicles in the country, Society of Manufacturers of Electric Vehicles (SMEV) has asked for an extension of subsidies for EVs under the FAME-II scheme.
The industry has also sought the inclusion of light to heavy commercial vehicles in it to promote electric mobility.
In its pre-Budget recommendations, the industry body also called for a uniform 5 per cent GST on spare parts for electric vehicles. “The validity of FAME II is set to expire on March 31, 2024. We believe FAME’s validity needs to be extended since we have yet to meet the penetration the subsidy was supposed to catalyse,” news agency PTI reported SMEV as saying in a statement. The new FAME II scheme should be linked to e-mobility conversion rather than being time-based, it added.
The EV industry body said market trends suggest that e-mobility, particularly electric two-wheelers (E2W) has the potential to continue growing once it reaches 20 per cent of the total two-wheeler market.
“The subsidy can be tapered thereafter,” it said, adding the FAME II scheme should have provisions to directly transfer the subsidy to customers.
EV sales in India have seen a robust uptick over the last few years. While 48,179 EVs were sold in 2020-21, the firgures increased to 2,37,811 in 2021-22 and 4,42,901 in 2022-23 (till December 9).
Minister of Heavy Industries, Mahendra Nath Pandey, said in a written reply in the Lok Sabha that the ministry has implemented a scheme titled ‘Faster Adoption and Manufacturing of Electric Vehicles in India Phase II’ (FAME India Phase II) to promote adoption of electric/hybrid vehicles in the country.
SMEV also suggested inclusion of light commercial vehicles (LCV) and medium and heavy commercial vehicles (M&HCV) on a project-mode basis as India must prepare for the transition to e-mobility in trucks and heavy commercial vehicles in three to four years.
For this, it said, “Increase the scope of FAME to include commercial vehicles on a project mode basis. Today, trucks account for over 40 per cent of India’s fuel consumption and over 40 per cent of the greenhouse gas emissions across the road transport sector.”
Further, SMEV also sought expansion of the FAME II subsidy to electric tractors.
On taxation, SMEV said while 5 per cent GST is levied on electric vehicles, for spare parts, there is no clarity and the industry ends up paying 28 per cent, except for batteries.