India is a country that heavily relies upon various forms of polluting hydrocarbons for energy to run its industries, power plants and vehicles. With the increasing industrialization and population, it is challenging to even fathom the consequences of depletion of non-renewable energy sources. However, in light of the growing concern of climate change, India is on an upward trajectory to ensure the adoption of other eco-friendly alternatives for energy. In this regard, electronic vehicles (“EVs“) are currently being perceived as a lucrative alternative to the customary petrol/ diesel vehicles.
India's e-mobility initiatives for pollution-free commercial and private transportation have prompted many established vehicle manufacturers and new entrants to begin manufacturing of EVs in the last mile connectivity and bulk short/long distance transportation space.1 Mahindra & Mahindra is a leading vehicle manufacturer in the country and is expected to launch eight EVs by 2027. It is expected that four of these EVs will be derived from the company's range of petrol and diesel products and by 2025, the company may launch four new SUVs that will be underpinned by a “born-electric” platform and designed for electrification from the ground up. The executive director of Mahindra & Mahindra, at a recent press conference indicated that the company has earmarked a substantial outlay, of approximately INR 3,000 crore (approx. US $ 400 million) for auto electric products, in order to aggressively expand its all-electric range. He also mentioned that the company was open to funding coming in from outside that will help in a faster growth, not just for capital, but also in respect of any expertise which the future investors/ private equity firms or other strategic partners may provide.2 We understand that TVS Motor, India's third largest two-wheeler maker, is in talks with a clutch of global private equity investors to raise INR 2,220-3,700 crore (approx. US $ 300-500 million) for its new EV subsidiary with the aim to expand its EV business.3
The rise in the prices of petrol and diesel across the World has been a contributing factor in initiating the shift to EVs. While a part of the population takes pride in opting for an environmentally safe alternative, another part has started looking at EVs in light of the hike in prices of conventional fuel sources which has led to sharp escalation of overall running cost of petrol/diesel vehicles.
The Government has been trying to encourage adoption of electric mobility through several policy initiatives as it wants to curb crude imports and high level of pollution in Indian cities. In this article, we look at some of the initiatives of the Government to ensure significant adaptability of the public towards EVs, including an overview of the laws applicable in this sector.
The Government of India has taken several initiatives in order to promote the adoption of EVs as a viable alternative. In this regard, we have provided below, a brief overview of such initiatives proposed by the Government.
The FAME scheme was divided into two phases to ensure smoother implementation process. Accordingly, Phase – I of this scheme was initially launched for a period of 2 years, which commenced from April 1, 2015. The National Automotive Board (“NAB“) was also set up by the Government with a panel of experts in the field to assist the NBEM and act as the main operating agency to implement FAME-I.
Global revenue (including revenue of group companies)
INR 10,000 crore (approx. US $ 1.35 billion)
INR 500 crore (approx. US $ 67.40 million)
Investment in fixed assets (including investment of group companies)
INR 3,000 crore (approx. US $ 405 million)
INR 150 crore (approx. US $ 20 million)
Furthermore, eligible companies are required to ensure determined sales value of INR 125 crore (approx. US $ 16.83 million) under the champion OEM incentive scheme and of INR 25 crore (approx. US $ 3.35 million) under the component champion incentive scheme for the first year. The eligible companies are also required to ensure a growth of 10% in determined sales value on year-to-year basis going forward.
Apart from the above, certain legislations such as the Bureau of Indian Standards Act, 2016 and the rules and regulations framed thereunder and various other regulations that have been formulated under the Environment Protection Act, 1986, such as the Batteries (Management and Handling) Rules, 2011, the E-Waste (Management) Rules, 2016, the Dangerous Goods (Classification, Packaging, Labelling) Rules, 2013 and Hazardous and other Wastes (Management and Transboundary Movement) Rules, 2016, etc. also become applicable to manufacturers of EVs/ EV components.
Like two sides to a coin, every technological advancement, comes with challenges in its implementation. Some of the major issues with respect to the adoption of EVs are discussed below.
In order to resolve these barriers and for electric mobility to take off, it is essential that continued government intervention/support, high level ownership, adoption of mission mode approach for fast decision making, collaboration amongst various stakeholders, long term commitment with clearly defined short term and long term objectives and a synergized – holistic approach is essential.
Having realised the major setbacks that was being faced by the automobile industry with respect to adoption of EVs, certain steps have been taken by the Government in consultation with the MoP and DHI to solve these hurdles, as briefly described below.
In the recent Express Mobility 2021 EV Conference: 'In-depth analysis of the Indian EV Ecosystem', Mr. Nitin Gadkari, the Minister of Road, Transport and Highways, Government of India, in his speech highlighted that e-mobility is the future for India. He mentioned that the government intends to have EV sales penetration of 30% for private cars, 70% for commercial vehicles, 40% for buses, 80% for two and three-wheelers by 2030. In this context, he emphasised that the Government is supporting localisation of all EV components and INR 57,000 crore (approx. US $ 7.56 billion) have been allotted for the same through the PLI scheme. He further mentioned that the Government has also allocated INR 18,100 crore (approx. US $ 2.45 billion) for the manufacturing of advanced battery cells.33
Recently, the Ministry of Heavy Industries had also organized a round table conference to promote EVs in India. All relevant stakeholders from the Central and the State Governments as well as the Union Territories, along with industry leaders from automotive OEMs and automotive component manufacturers, battery storage entrepreneurs, start-ups and technical experts were a part of the conference to work out strategies to promote adoption of EVs in India and attract investments in manufacturing of EVs, batteries and high technology automotive components. During the conference, the Union Minister of Heavy Industries, Mr. Mahendra Nath Pandey emphasized that EVs have become a global phenomenon and that India should look to be on the centre stage of the global electric auto market. The conference placed reliance on three national schemes namely, FAME-II scheme, the National Programme on Advanced Chemistry Cell (ACC) and the PLI scheme for automobile and auto components.
It is noteworthy that currently, the focus of the Government is primarily towards addressing the issue of dependence of India on non-renewable energy sources and fossil fuels, in light of which various plans and incentive schemes have been floated to accelerate the market for EVs in India.
However, India is still on its way to formulate the laws and regulations that shall specifically govern the working of EVs. Having said so, it is also evident that although EVs have in essence penetrated the Indian market, but clearly there is a limitation in the number of EV models as compared to the petrol/ diesel fuelled vehicles, available in the market, as a result of which, the demand side of EV is rather conservative. However, a paradigm shift to EVs by 2030 as set by the Government appears to be a utopian target, unless there are more initiatives taken by the Government to increase awareness amongst the public and formalise the legal regime surrounding EVs to ensure smoother and faster adaptability of the EVs amongst the consumers.
1. Singhal, Neeraj Kumar, 'Electric Vehicle Policy Framework in India', Medium, available online at https://medium.com/batterybits/electric-vehicle-policy-framework-in-india-6bdc3ed64ed7, last accessed on November 20, 2021.
2. Gandhi, Shirish, 'Mahindra plans to launch 8 EVs by 2027 under new sub brand', Autocar India, available online at https://www.autocarindia.com/car-news/mahindra-electric-sub-brand-likely-plans-for-8-ev-launches-by-2027-422580, last accessed on November 28, 2021.
3. Thakkar, Ketan and Shyam, Ashutosh R, 'TVS in talks to raise up to $500 million for EV subsidiary', Economic Times, available online at https://economictimes.indiatimes.com/industry/renewables/tvs-in-talks-to-raise-up-to-500-million-for-ev-subsidiary/articleshow/87595707.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, last accessed on November 28, 2021.
4. Automotive Mission Plan 2006-2016 issued by Ministry of Heavy Industries & Public Enterprise, available online at https://dhi.nic.in/writereaddata/Content/Automotive%20Mission%20Plan%20(2006-2016).pdf.
5. Press Release available at https://pib.gov.in/newsite/PrintRelease.aspx?relid=71401.
6. Electricity Mobility Mission Plan 2020, issued by DHI, available online at https://dhi.nic.in/writereaddata/Content/NEMMP2020.pdf
7. Please refer https://www.fame-india.gov.in/ViewNotificationDetails.aspx?RowId=5
8. Please refer https://fame-india.gov.in/WriteReadData/userfiles/file/FAME-II%20Notification.pdf
9. The Department of Heavy Industries has issued an Expression of Interest Inviting Proposals for availing incentives under Fame India Scheme Phase II for deployment of EV charging infrastructure on Highways/ Expressways dated October 12, 2020 (F.No. 1(06)/2019-NAB-II (Auto) (21349)).
10. Press release available at https://pib.gov.in/PressReleasePage.aspx?PRID=1744394.
12. Available at https://www.mea.gov.in/Speeches-Statements.htm?dtl/34466/National+Statement+by+Prime+Minister+Shri+Narendra+Modi+at+COP26+Summit+in+Glasgow, last accessed on November 25, 2021
13. Please refer http://www.siamindia.com/uploads/filemanager/47AUTOMOTIVEMISSIONPLAN.pdf
14. Please refer https://dhi.nic.in/writereaddata/UploadFile/ACC%20Scheme%20Notification%209June21.pdf.
15. Please refer https://dhi.nic.in/writereaddata/UploadFile/PLI%20Auto%20Scheme.pdf.
16. Available at https://www.ibef.org/blogs/vehicle-scrappage-policy, last accessed on December 2, 2021.
17. Please refer https://medium.com/batterybits/electric-vehicle-policy-framework-in-india-6bdc3ed64ed7
18. Please refer https://powermin.gov.in/sites/default/fi les/uploads/Revised_MoP_Guidelines_01_10_2019.pdf
19. Please refer https://powermin.gov.in/sites/default/files/webform/notices/OM_merged.pdf
20. Please refer https://powermin.gov.in/sites/default/files/Amendment_in_Revised_Guidelines_EV.pdf
21. Please refer https://mohua.gov.in/upload/whatsnew/5c6e472b20d0aGuidelines%20(EVCI).pdf
22. Please refer https://cea.nic.in/wp-content/uploads/2020/02/measures_safety_2019-1.pdf
23. Please refer notification dated May 27, 2021 vide GSR 352 (E).
24. Please refer http://126.96.36.199/loksabhaquestions/annex/173/AU1018.pdf.
25. Dream or nightmare: Why India should postpone its electric vehicle plans for ten years, available at:
27. India to require 400,000 charging stations for 2 mn EVs by 2026, available at: https://www.business-standard.com/article/automobile/india-to-require-400-000-charging-stations-for-2-mn-evs-by-2026-report-121061200880_1.html, last accessed on December 2, 2021.
28. Please refer https://pib.gov.in/PressReleasePage.aspx?PRID=1717977.
29. A Twist in the Tale: Electric Vehicles Will Worsen India's Pollution Crisis, available at https://thewire.in/environment/electric-vehicles-lithium-ion-batteries-coal-power
30. Please refer http://moef.gov.in/wp-content/uploads/2020/02/BATTERY-RULE.pdf
31. Please refer https://scroll.in/article/992703/india-faces-two-major-challenges-in-its-transition-to-electric-vehicles
32. Govt plans to order Uber, Ola to convert 40% of their cars to electric by April 2026: report, available at https://www.businesstoday.in/current/economy-politics/govt-plans-to-order-uber-ola-to-convert-40-of-their-cars-to-electric-by-april-2026-report/story/354244.html
33. Available at https://www.financialexpress.com/auto/electric-vehicles/express-mobility-2021-ev-conference-in-depth-analysis-of-the-indian-ev-ecosystem/2378276/), last accessed on November 28, 2021.
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