India’s EV Strategy Boosted With Accelerated Government Policies


The Indian government intends to expedite three significant electric vehicle initiatives within its first hundred days, featuring programs for local battery manufacturing incentives and the procurement of electric buses under FAME 3. These efforts are designed to enhance clean transportation and help India achieve its net-zero objectives, responding to the increasing worldwide demand for electric vehicles.

The proposed measures include allocating 10 GWh capacity under the PLI ACC (Production Linked Incentive Scheme for Advanced Chemistry Cells) for establishing locally advanced battery production units, implementing a payment security mechanism to provide interest-free capital to automakers in the event of payment defaults by state-transport undertakings, and launching the third iteration of the Faster Adoption and Manufacturing of Electric Vehicles (FAME 3) program. These initiatives are integral to the 100-day agenda aimed at hastening the shift towards clean mobility solutions to meet net-zero targets, a senior official disclosed. Furthermore, a key meeting chaired by the Prime Minister with secretaries from various ministries is scheduled for later this month to finalize this 100-day plan.

The government has already received seven bids for re-awarding the 10 GWh capacity under the PLI ACC, accompanied by a financial commitment of INR 3,620 crore. An official mentioned that the awards for these tenders are expected to be finalized soon and emphasized that local production of advanced batteries is crucial for reducing the costs of electric vehicles. The pre-bid consultation in February witnessed participation from 18 firms, including Reliance Industries and JSW Neo Energies.

On the consumer side, a revamped FAME scheme—now in its third edition—is anticipated to be unveiled in the upcoming budget with a budget of about INR 10,000 crore, aimed at encouraging the purchase of two-wheelers, three-wheelers, and electric buses. Unlike its predecessors, FAME 3 will be active for just two years.

The official further noted the priority of deploying more electric buses. The government previously supported the purchase of 7,000 electric buses under FAME 2 and plans to expand this number under the new scheme. Discussions are also in progress to enlarge the scope of payment security mechanisms to mitigate risks for bus manufacturers. In a collaborative effort with the United States, India has initiated a fund of USD 390 million to deploy 10,000 e-buses. Looking ahead, a USD 10 billion payment security fund is being considered to facilitate the deployment of 38,000 buses across India. The shift from diesel to electric buses is a governmental priority due to its substantial social and environmental benefits.


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