ICCK

he finance minister's announcement on supporting the development of an ecosystem for electric mobility is expected to help boost manufacturing of electric vehicles as well as address one of the biggest obstacles to EV adoption: lack of convenient battery charging stations.

"... will expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure," FM Nirmala Sitharaman said in her interim budget speech on Thursday. 

Lack of charging stations has been a key concern for those wanting to buy electric vehicles, as that made them worried about the battery draining out, stalling the vehicle.

While carmakers are awaiting details like the number of charging stations the government is aiming to set up, industry executives said the overall budget intent to encourage adoption of EVs, especially in the public transport segment, will help consumers switch to cleaner forms of mobility.

"The announcement on strengthening the electric vehicle ecosystem by supporting manufacturing and charging infrastructure will boost the development and adoption of EVs in the country," Society of Indian Automobile Manufacturers (SIAM) president Vinod Aggarwal said. "The payment security mechanism for adoption of e-buses for the public transport network is also a good step."
 

The government is already working towards expanding the EV charging infrastructure across the country. Last year, the ministry of heavy industries sanctioned Rs 800 crore as a capital subsidy to three state-run oil marketing companies to establish 7,432 public EV charging stations by March 2024. It also approved setting up of 148 charging stations by other entities under this scheme.
 

There were 6,586 charging stations in India at the end of March 2023.

In her budget speech, Sitharaman said emphasis will be given to bring on road more electric buses to reduce vehicular emissions and realise the country's net-zero targets.

"Greater adoption of e-buses for public transport networks will be encouraged through a payment security mechanism," the minister added.

The payment security mechanism usually comprises a fund that provides interest-free capital in case of default in payments.

The government has reduced the allocation under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme to Rs 4,807 crore in the revised estimates for fiscal 2024, from the initial budget estimate of Rs 5,172 crore. It had allocated Rs 2,403 crore in FY23.

The FY25 outlay at Rs 2,671 crore is part of the existing allocation of FAME-II and will be used to clear claims. The government has so far not said anything officially about extending the scheme.

Sitharaman said rooftop solarisation - which will enable 10 million households to obtain up to 300 units of free electricity every month - will, among other factors, help in charging of electric vehicles.

The FAME scheme has been successful in achieving goals over the adoption of electric two-wheelers and buses. But its implementation was marred by alleged instances of companies not adhering to localisation commitments while claiming subsidies. 

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