India’s Evolving EV Landscape

 In Blog, EVs, Indian Market

The Indian EV landscape is buzzing with activities and announcements – from Central & State Governments to boost and incentivize EV adoption and production to those from the industry about product launches, investments etc.

This motivates us to write about the current happenings to keep you abreast with the latest ongoings.

In this article let’s take a look at what has evolved in the past few months.

Government Announcements:

Central Government:

Production Linked Incentives (PLI) for Automobile Sector

The Government of India, in its Union Budget 2021-22 announced an outlay of INR 1.97 Lakh Crore for Production Linked Incentive (PLI) scheme for 13 key sectors with an aim to boost local manufacturing and generate employment opportunities. The largest share of this incentive was allotted to Automobile & Auto component ancillaries amounting to INR 57,000 Crore.

We expect that this PLI scheme will go a long way in increasing the automotive sector’s contribution to GDP even further, generating jobs, increasing exports and reducing dependence on imports.

 Production Linked Incentives (PLI) for manufacturing Lithium Ion cells

Additionally, the Government has launched another Production Linked Incentive (PLI) scheme, “NATIONAL PROGRAMME ON ADVANCED CHEMISTRY CELL (ACC) BATTERY STORAGE”.

The Department of Heavy Industries has already issued a notification for this scheme with total incentive pay out over the period of 5 years of the Scheme of Rs. 18,100 crore.

Key highlights of this scheme are as below –

–      The scheme envisages setting up of a cumulative ACC manufacturing capacity of 50 GWh for ACCs and an additional cumulative capacity of 5 GWh for Niche ACC Technologies.

–      The manufacturing facility as proposed by the beneficiary firm under the RFP would have to be commissioned within a period of 2 years. The subsidy will be disbursed thereafter over a period of 5 years.

–      The beneficiary has to ensure achieving a domestic value addition of at least 25% and incur the mandatory investment (₹ 225 crore /GWh) within 2 Years and raise it to 60% domestic value addition within 5 Years.

We feel that local manufacturing of battery cells will be a game changer for the EV industry.

FAME 2 Scheme extended for two more years with enhanced incentive for two wheelers

The Department of Heavy Industry has extended FAME 2 for another two years, so it will now be valid till 31st March 2024.

The incentive on qualified electric two wheelers has now been increased to INR 15,000 / kWh from initial INR 10,000 / kWh and up to 40% of vehicle cost.

The industry has welcome both the extension of two years and 50% increase in incentive. We expect that these measures will translate to sudden increase in EV adoption.

State Governments:

Now let us look at the various subsidies and announcements made by the State Governments

 

Gujarat State

Gujarat State’s EV Policy 2021 has come in effect from 1st July 2021 for a period of 4 years.

Key points are listed below –

  • Total scheme outlay for subsidy is INR 870 crores.
  • Demand incentives of INR 10,000 per kWh for the first 200,000 EVs including 1,10,000 two wheelers, 70,000 three wheelers and 20,000 four wheelers.
  • 100% waiver on the registration fee for EVs.
  • Commercial public EV charging stations to be eligible for 25% capital subsidy up to Rs. 10 lakhs per station for the first 250 charging stations.
  • State Government to exempt 100% electricity duty of EV charging stations during the period of this policy.

The latest policy has fueled optimism among EV makers and sellers in the state, with some OEMs already announcing substantial reduction in prices. We expect Gujarat to become one of the leading states for EV adoption.

Delhi State

Delhi Government launched “Switch Delhi” campaign on 4th February 2021, in addition to the State EV policy launched in August 2020.

Highlights of Switch Delhi campaign:

  • the Government has mandated all its fleet – both owned and hired – to be converted to electric in Six Months.
  • already issued tenders for setting up 100 public charging stations
  • incentives of Rs. 30,000 on purchase of electric two or three wheelers

With the ambitious goal of converting Government fleet in six months, the Switch Delhi plan changes the scene for electric passenger cars in the country. With the investments in public charging stations and additional incentives, we expect Delhi to give tough fight with Gujarat for leading EV adoption.

 Karnataka State

The Karnataka government has tweaked its electric vehicle and energy storage policy on 27th May 2021.

Key changes are:

  • 15% capital subsidy to investors on value of fixed assets over five equal annual payments, with maximum land covered under this incentive being 50 acres.
  • Production linked subsidy of 1% on turnover, which will be provided for a period of five years starting from the first year of commercial operations
  • 10,000 per month per trainee to encourage in-plant training provided by the EV manufacturers in the state

Apart from incentivizing adoption of EVs and setting up charging infrastructure, states are changing their EV policies to attract EV manufacturers to set up their manufacturing facilities in the state. The competition between states is fierce and that will only help the Indian EV industry.

Other Announcements / Events:

Tesla, 8th January 2021

In a big step towards entering the Indian market, Tesla has registered its India subsidiary

Tata Motors, 28th June 2021

Tata Motors has announced the plan to roll out 10 new battery electric vehicles in its domestic product portfolio by 2025

Mahindra, 11th April 2021

Mahindra will put in fresh investments to the tune of Rs 3,000 crore on its electric vehicles business in the next three years, while it looks for more alliances and partnerships in the vertical.

Triton EV, 26th June 2021

Triton has signed a MoU for an investment of INR 2100 Crore with Telangana government for setting up a manufacturing unit at Zaheerabad.

Triton has received order for 4000 EV Semi Trucks worth $600 Mn from Foxbase Technologies

Ola Electric, March 2021

Ola Electric announced that it would be setting up the world’s largest electric scooter plant in Hosur over the next 12 weeks, at a cost of US$330 million, and aiming to produce 2 million units a year. By 2022, Ola Electric wants to scale up production to pump out 10 million vehicles annually or 15 percent of the world’s e-scooters.

Revolt Intellicorp, 28th April 2021

Smart electric bike manufacturer promoted by Rahul Sharma of Micromax fame, raised Rs. 150 Cr. from Rattan India Group (formerly Indiabulls Power).

Magenta EV solutions, 22nd May 2021

Magenta provides end to end hardware, software, installation and support for EV charging infrastructure. The company has received $15 Mn. investment from Mr. Kiran Patel

Ion Energy, 1st July 2021

Ion Energy, a BMS provider, raised $3.6M in Pre-Series A funding from Amazon’s Climate Pledge Fund

Cell Propulsion, 10th June 2021

This startup, engaged in developing electrification solutions for fleets of commercial vehicles, has raised $2 million in debt & equity from its existing investors Endiya Partners, growX Ventures, Huddle Accelerator & Micelio Mobility, among others

Cellestial E-Mobility, 28th May 2021

The maker of first electric tractor in India, the startup has raised $0.5 Mn in pre-series A funding.

Reliance Industries, 25th June 2021

Announced major clean energy initiative with Giga-scale plants for Solar PV, batteries, green hydrogen and fuel cells

Investment of Rs. 60,000 Crores for plants and Rs. 15,000 crores for upstream / downstream industries

Established Indian players such as Tata Motors and Mahindra are planning to strengthen their EV offering with investments and new models whereas international players such as Tesla and Triton are establishing their India offices and plants.

Investments are pouring in for EV manufacturers – all vehicle segments including off-highway, component makers, designers, charging infrastructure and even EV ride sharing service providers, as evident from the list above.

Big ticket events such as announcements from Ola Electric and Reliance indicate that India has crossed the tipping point and next decade will be very exciting for EV industry in India.

To know more about the safe smart and sustainable technologies that we bring to India, feel free to write to me at ashutosh@quanzen.com

 

 

Recommended Posts

Please submit your query and we’ll get back to you at the earliest.

Not readable? Change text. captcha txt