Against the expectations surrounding the FAME-III, the ₹109 billion PM E-DRIVE scheme will no longer support E-cars and hybrid vehicles except ambulances.
On Wednesday, the Union Cabinet approved a new scheme called ‘PM Electric Drive Revolution In Innovative Vehicle Enhancement’ (PM E-DRIVE) to boost electric vehicle adoption in India. With a budgetary outlay of ₹109 billion, set aside for two years, this will replace the previous FAME initiative, which concluded in March.
Contrary to initial expectations, the new scheme does not extend support to electric cars or hybrid vehicles (except ambulances). Instead, it focuses on providing subsidies for electric two-wheelers, three-wheelers, buses, and trucks. The scheme aims to support 2.48 million electric two-wheelers, 316,000 electric three-wheelers, and 14,028 electric buses.
To benefit from demand incentives, buyers of electric vehicles will receive e-vouchers through the scheme’s portal, which will generate an Aadhaar-authenticated e-voucher at the time of purchase.
Information and Broadcasting Minister Ashwini Vaishnaw announced that the PM E-DRIVE Scheme will add 88,500 electric vehicle chargers, a decision made in a Union Cabinet meeting led by Prime Minister Modi.
A total of ₹43.91 billion has been allocated for purchasing electric buses by state transport agencies and public transport organisations. The demand for these buses will be managed by CESL in nine cities with populations exceeding 4 million, including Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune, and Hyderabad. Additionally, intercity and interstate electric buses will receive support in coordination with state authorities.’
Additionally, ₹5 billion has been set aside for the introduction of electric ambulances. This new government initiative aims to encourage the use of electric ambulances to ensure more comfortable patient transportation.
An allocation of another ₹5 billion has been set aside to encourage the adoption of electric trucks.
To alleviate range anxiety among electric vehicle (EV) users, the government will establish public electric vehicle charging stations (EVPCS). These stations will be set up in cities with significant EV use and along selected highways. The plan includes installing 22,100 fast chargers for electric four-wheelers, 1,800 fast chargers for electric buses, and 48,400 fast chargers for electric two-wheelers and three-wheelers. The outlay for the EVPCS is ₹2,000 crore.
Furthermore, Vaishnaw announced that the PM-eBus Sewa-Payment Security Mechanism (PSM) scheme, designed to aid public transport authorities (PTAs) in acquiring and operating electric buses, has a budget of ₹34.35 billion. This funding will support the deployment of 38,000 electric buses.
According to another official statement, the scheme will facilitate the introduction of over 38,000 electric buses between FY 2024-25 and FY 2028-29. It will also provide support for the operation of these buses for up to 12 years following their deployment.
Currently, most buses used by PTAs rely on diesel or CNG, harming the environment. Electric buses offer eco-friendly benefits and lower operating costs but come with high initial expenses and potentially lower revenue.
To address these costs, PTAs use a public-private partnership (PPP) model with a gross cost contract (GCC), where OEMs or operators purchase and manage the electric buses, receiving monthly payments. However, OEMs and operators hesitate due to fears of defaulting to payment.
The PSM programme addresses this by guaranteeing prompt payments through a special fund. If PTAs fail to pay, CESL will cover the costs, and the PTAs will reimburse the funds later.
The FAME Scheme, introduced in April 2015, uses consumer incentives to boost the production and sale of electric vehicles. Over 1.6 million electric vehicles have benefited from this scheme.
