PM E-DRIVE Scheme

Syllabus: GS3/Economy

Context

• The government has launched the PM E-DRIVE Scheme, for faster adoption of electric vehicles
  • By setting up of charging infrastructure and development of EV manufacturing ecosystem in India.

About PM E-DRIVE Scheme

• The scheme shall be implemented from October 1, 2024 to March 31, 2026.
• The EMPS-2024 (Electric Mobility Promotion Scheme) is being subsumed under the PM E-DRIVE scheme.
• Subsidy: The subsidy under the scheme for electric two-wheelers has been fixed based on battery power at Rs 5,000 per kilowatt hour but the overall incentive will not exceed Rs 10,000 in the first year.
  • In the second year, it will be halved by Rs 2,500 per kilowatt hour, and the overall benefit will not exceed Rs 5,000. 
  • Three-wheelers, including e-rickshaws, will get a demand incentive of Rs 25,000 in the first year, which will be halved to Rs 12,500 in the second year.
  • For the L5 category (cargo three-wheelers), they will get a benefit of Rs 50,000 in the first year, and for the second year, it is Rs 25,000.
• e-Vouchers: Ministry of Heavy Industries is introducing e-vouchers for EV buyers to avail demand incentives under the scheme.
  • One vehicle per Aadhaar will be allowed. As soon as the vehicle is sold, e-voucher will be generated.
  • The signed e-voucher will be essential for OEM (original equipment manufacturer) to claim reimbursement of demand incentives under the scheme. 
• Charging Stations: The scheme addresses range anxiety of EV buyers by promoting in a big way the installation of electric vehicle public charging stations (EVPCS). 
  • These EVPCS shall be installed in select cities with high EV penetration and also on selected highways.

What are Electric Vehicles?

• An electric vehicle (EV) is one that operates on an electric motor, instead of an internal-combustion engine that generates power by burning a mix of fuel and gases.
• Therefore, such a vehicle is seen as a possible replacement for current-generation automobiles, in order to address the issue of rising pollution, global warming, depleting natural resources, etc.

Benefits of the Electric Vehicles:

• Energy Efficiency: Electric motors are significantly more efficient than internal combustion engines, converting a higher percentage of the energy from the grid into vehicle movement.
• Lower Operating Costs: The running cost of an electric vehicle is much lower than an equivalent petrol or diesel vehicle.
• Environmental Impact: EVs produce zero tailpipe emissions, which helps reduce air pollution and greenhouse gas emissions. 
• Reduced Dependence on Fossil Fuels: EVs decrease reliance on finite fossil fuels like oil and gas, promoting energy independence and reducing vulnerability to fluctuations in fuel prices and supply disruptions.
• Health Benefits: By reducing air pollution, EVs can have positive impacts on public health, potentially reducing the incidence of respiratory illnesses and other health problems associated with poor air quality.

India’s Electric Vehicle Policy

• Aim: To facilitate smooth growth in the sector and achieve the ambitious target of having EV sales penetration of 30% of private cars, 70% of commercial cars, 40% of buses and 80% of two and three-wheelers by 2030.
• National Electric Mobility Mission Plan (NEMMP): The NEMMP was launched in 2013 with the goal of achieving national fuel security by promoting hybrid and electric vehicles. 
• FAME India Scheme: The Faster Adoption and Manufacture of Electric Vehicles (FAME) India scheme was launched in 2015 to promote the manufacturing and adoption of EVs. 
• GST Reduction: The Indian government has reduced the Goods and Services Tax (GST) on electric vehicles from 12% to 5%, making EVs more affordable for consumers.
• Charging Infrastructure: The government is working on expanding the charging infrastructure across the country to address range anxiety and encourage EV adoption. 
• Incentives for Manufacturers: In addition to incentives for consumers, the government provides subsidies and incentives to manufacturers to promote domestic production of EVs and their components. 
• Battery Swapping Policy: To address concerns about battery charging infrastructure and range limitations, the government is exploring the possibility of implementing battery swapping stations where EV owners can quickly exchange depleted batteries for fully charged ones.
• PLI Scheme for National Programme on Advanced Chemistry Cell (ACC) Battery Storage was launched in 2021 to enhance India’s manufacturing capabilities for the manufacture of ACC.

Challenges in Adoption

• High Initial Cost: The upfront cost of purchasing an electric vehicle in India is relatively high compared to traditional internal combustion engine vehicles. 
• Limited Charging Infrastructure: The availability of charging infrastructure remains a significant barrier to EV adoption in India. 
• Range Anxiety: Range anxiety, or the fear of running out of battery charge before reaching a charging station, is a prevalent concern among Indian consumers considering EVs.
• Battery Technology and Supply Chain: India relies heavily on imported lithium-ion batteries, which increases costs and makes EVs vulnerable to supply chain disruptions.
• Consumer Awareness and Education: Many consumers in India lack awareness and understanding of electric vehicles, including their benefits, technology, and available models.
• Socioeconomic Factors: Socioeconomic factors such as income levels, consumer preferences, and infrastructure disparities across different regions of India influence the adoption of electric vehicles. 

Way Ahead

• India has been actively seeking to secure lithium resources to meet the growing demand for lithium-ion batteries, particularly in the context of electric vehicles (EVs) and renewable energy storage. 
  • States like Telangana are also aspiring to become the EV manufacturing hub of India. 
  • India also aims to exploit lithium deposits in places like Jammu and Kashmir. 
• The government has been promoting the adoption of electric vehicles to address environmental concerns and reduce dependence on fossil fuels. 
• Securing a reliable supply of lithium is crucial for the development and growth of the electric vehicle industry in India.

Source: BS