Chennai: The electric vehicle scenario in India has been quite an enigma for both manufacturers and customers in the market. With the government dropping talks on fully electric future by 2030 and delaying the second phase of the FAME scheme, the future although seemingly bleak, could hold surprises.
Expected to be implemented by October, the second phase of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) in India has been put aside by the Modi-led Centre.
The scheme that was aimed at promoting mass adoption and manufacturing of electric and hybrid vehicles in India. The second phase was scheduled to be announced in April 2017 and almost 20 months later the government continues to remain silent on the subsidies it will provide to adopt EVs in India.
In the last two years, phase one of FAME has been extended four times as the government tries to work on new range of subsidies. The latest extension comes in effect till March 2019 or till a notification for the second phase is announced.
Arun Jaitley led Ministry of Finance has approved the increase in budget in the first phase by Rs 100 crore to Rs 895 crore.
EV Manufacturers
For over a year now the government has been talking about rolling out the second phase of this scheme but the EV manufacturers in India still wait in anticipation. Phase one of FAME has already been extended four times in the last two years.
On several occasions, the central government has been clear that EVs are the way forward to reduce India’s oil import bill and also to achieve zero-emissions.
Problems faced
While automakers in India have announced heavy investments in EVS, News Today got in touch with Karthick Athmanathan, who is the head of Electric Vehicles and e-Mobility Solutions at Ashok Leyland.
“The initial scheme, as conceived and published was after elaborate consultations and joint working with the industry. So there were no issues expected, had it been done as per the scheme published,” he said about the FAME conceptualization.
“Even in that, there was a concern for disbursement since DHI chose to pay the subsidy over three years in three equal installments. Not many people were convinced that this would happen properly,” he added and stated that delays in launching the scheme saw the DHI rush things.
EV speak
Karthick was sticking clearly to the commercial vehicle segment in his responses. Speaking about electric only future, he said, “Ashok Leyland does not see any potential for hybrids in CV market and believe that going directly – electric is a good strategy. So Ashok Leyland has done that.”
“We believe that the supply chain costs for batteries, power electronics and motors will be competitive with diesel only by 2024 for CVs. Based on this, for city Buses, we believe that meaningful numbers (more than 2,000~3,000 buses per year) will start only between 2022 and 2024,” he said.
“It is only by 2025 that Ashok Leyland expects EV CV to achieve TCO (Total Cost of Ownership) parity with Diesel. So volumes will take a quantum leap around that time (it is not a linear chart as is relevant for passenger vehicles),” he added.
In his comparison with the passenger vehicle (PV) segment, he said, “Unlike passenger vehicles, EV CVs are also not influenced by the readiness of charging infrastructure, since they will be custom designed and implemented. However, they will be sensitive to Grid strength and peak hour load factors.”
Speaking about reaching parity in the market, the top man at Ashok Leyland said, “Among the various automobiles, commercial vehicles (including taxis and three-wheelers) will reach diesel TCO parity first, since they run more kilometers every day compared to the passenger vehicles (cars, two-wheelers, etc).”
On mandates that governments might bring in and gave a timeline for it. He said, “We expect cities to come up with regulatory mandates (to reduce pollution) that will make city public transport and goods transport electric. This is expected to happen within two years after there is evidence of the OEMs delivering in larger numbers – buses, last mile and goods delivery segments.”
To summarize, with current information and market and technology, the head of EVs at the firm, said, “We believe that “electric only” is going to happen for cities and towns by 2030 with regard to commercial vehicles. For long distance, staff and school transport, it will happen only when the regulation mandates it since they do not have technology and cost solutions that will work for the users and customers.”
Box:
Highlights
* To promote the adoption of electric vehicles (EVs) in India on a large scale, the Central Government further increased the subsidies by Rs 100 crore taking the total to Rs 895 crore under the FAME scheme as per the latest official notification issued by the government.
* The number of Electric vehicles in India is less than one per cent of total vehicle sales and the lack of charging infrastructure is the other big issue.
* Automakers in India have announced heavy investments in electric vehicles going forward and have not really demanded any subsidies to promote EVs.