India's Push to Strengthen Electric Vehicle Ecosystem

In line with the Atmanirbhar Bharat vision and the goal of a Viksit Bharat by 2047, the Ministry of Heavy Industries has introduced several initiatives to bolster India’s Electric Vehicle (EV) ecosystem. This includes key schemes like the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE), which was notified on September 29, 2024, marking a significant step towards promoting electric mobility and reducing dependence on fossil fuels. The scheme, with a funding outlay of US$ 1.28 billion (Rs. 10,900 crore), spans from April 1, 2024, to March 31, 2026, and aims to incentivize the sale of electric two-wheelers (e-2W), three-wheelers (e-3W), trucks, ambulances, and buses, alongside strengthening charging infrastructure and vehicle testing upgrades.

Key Features of the PM E-DRIVE Scheme

The PM E-DRIVE initiative is designed to promote various facets of the electric mobility ecosystem, focusing not only on the manufacturing and sale of electric vehicles but also on creating the infrastructure required to support them. In addition to e-2W and e-3W, the scheme’s funding will support electric buses and trucks, contributing significantly to reducing carbon emissions in the transportation sector. The scheme integrates the Electric Mobility Promotion Scheme (EMPS) 2024, which was active earlier in 2024, and focuses on expanding the EV footprint across urban and rural areas.

Strengthening EV Manufacturing with the PLI Schemes

India has also introduced the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry, approved in September 2021. With an outlay of US$ 3.06 billion (Rs. 25,938 crore), this scheme incentivizes domestic manufacturing of electric vehicles and auto components, aiming to make India a global manufacturing hub for EVs. This initiative, in tandem with the PLI Scheme for Advanced Chemistry Cells (ACC), aims to establish 50 GWh of ACC manufacturing capacity in India, with a budget of US$ 2.13 billion (Rs. 18,100 crore), thus fostering the development of key battery components needed for EVs.

The FAME-II Scheme: A Critical Step Toward EV Adoption

Another crucial scheme in India’s EV push is the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II), which began in April 2019 with a funding of US$ 1.36 billion (Rs. 11,500 crore). The FAME-II scheme promotes domestic EV manufacturing, providing subsidies for the purchase of electric vehicles and charging infrastructure. This initiative has significantly accelerated the adoption of electric two-wheelers and buses in India, creating an enabling environment for EV market growth.

PM e-Bus Sewa and SPMEPCI: Driving Electric Bus and Car Manufacturing

In October 2024, the government launched the PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme with an outlay of US$ 405 million (Rs. 3,435.33 crore) to support the deployment of over 38,000 electric buses across the country. This scheme is expected to play a pivotal role in reducing urban air pollution, enhancing public transport systems, and contributing to the greening of India’s mobility.

Furthermore, the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI), notified on March 15, 2024, aims to boost the electric car manufacturing sector with a minimum investment of US$ 489.2 million (Rs. 4,150 crore). This initiative focuses on achieving a 50% Domestic Value Addition (DVA) target within the first five years, marking a significant step towards improving local manufacturing capabilities for electric passenger cars.

The Road Ahead for India’s EV Future

These concerted efforts are expected to transform India’s EV sector over the next few years, contributing significantly to green energy transition and reducing the country’s reliance on fossil fuels. By promoting local manufacturing, enhancing charging infrastructure, and introducing new policies, India is setting the stage for a robust EV ecosystem.

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