To Qualify For Subsidies EV Makers Should Localize Manufacturing: Govt

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All electric vehicle and hybrid manufacturers must localize the manufacturing of wheel rims integrated with hub motor from 1 October 2019.

Control units, chargers and AC units are among a slew of components that electric and hybrid vehicle manufacturers must build locally to qualify for subsidies under a government scheme to encourage the adoption of such vehicles.

Image for representational purpose only

The latest draft guidelines on Faster Adoption and Manufacturing of Hybrid and Electric Vehicles Scheme (FAME) list components that need to be built locally, with specific deadlines. FAME, which was introduced on 1 April 2015, entered its second phase (FAME-2) in April 2019.

Conditions of the guidelines
The guidelines, issued by the department of heavy industry (DHI) which implements the scheme, cover manufacturers of electric and hybrid two-wheelers, three-wheelers, rickshaws, four-wheelers and electric buses, along with associated deadlines for indigenization.

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All electric vehicle and hybrid manufacturers must localize the manufacturing of wheel rims integrated with hub motor from 1 October 2019.

The HVAC units (heating, ventilation and air conditioning) for electric cars are also scheduled for indigenization from that date. Other key components such as electronic throttles, vehicle control unit, onboard charger for all categories, and electric compressor and the DC charging inlet for electric cars and buses must be indegenized from 1 October 2020.

Despite the FAME scheme’s accent on localization, the guidelines allow imports of key battery components to overcome immediate technological challenges and manage costs. Imports of lithium-ion cells and battery packs, which attract a basic 5 per cent import duty, are slated to rise to 10 per cent and 15 per cent, respectively, from April 2021 to drive battery suppliers to localize the technology in India.

The draft rules notify vehicle testing agencies which will ensure compliance and issue eligibility certificates to the manufacturers for registering under FAME-2.

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