National EV Policy : Panel Urges Extension : Daily Current Affairs

Date: 27/03/2023

Relevance: GS-3: Science and Technology- developments and their applications and effects in everyday life.

Key Phrases: National EV Policy, Parliamentary Panel, Hydrogen Fuel Cell, Mobility Transition, Carbon Emissions, FAME, Flex Fuel Vehicles, Transmission Infrastructure.

Context:

Recently, a Parliamentary panel recommended that the government create a comprehensive national policy on electric vehicles (EVs) that encompasses State-level and international best practices.
The committee also called for an extension of the FAME-II scheme by an additional two years beyond its current deadline of March 31, 2024, to allow for a more thorough evaluation of its effectiveness.

Key Highlights:

According to the Committee on Estimates, the policy should include best practices for charging infrastructure, battery swapping, battery waste management/recycling, and public awareness.
The policy should also provide demand and supply side incentives, such as lower GST, waiving road tax, registration fee, and hire-purchase schemes at discounted interest rates by financial institutions.
Additionally, the policy should serve as a guiding policy for all States/ UTs to ensure uniform growth of the EV sector.

‘Continue support’:

The Committee stated that the removal of government support would lead to a significant price increase of EVs.
- The Committee also expressed concern that many start-ups involved in the EV sector may have to shut down if the FAME-II scheme is closed.
To avoid this, the Committee recommended extending the scheme by an additional two years to evaluate its effectiveness and make necessary adjustments to promote EVs.
Additionally, the Committee recommended introducing a comprehensive FAME-III scheme based on the experience gained from FAME-I and FAME-II once the extended period of FAME-II is over.
The goal of FAME-III would be to continue the penetration of EVs in the market to such a level that they can compete with internal combustion engine (ICE) vehicles in terms of upfront costs without requiring high incentives.

Adapting More Technology:

The Committee recommended that the government promote other technologies such as flex fuel vehicles, Hydrogen ICE, and Hydrogen fuel cell vehicles alongside EVs and hybrid vehicles.
- It emphasized the need for a greater emphasis on mobility transition.
In addition, the Committee suggested that a roadmap for setting up solar charging stations should be prepared in a time-bound manner to reduce dependence on electricity generated by using coal, in line with the government's green mobility objective.
Regarding the production-linked incentive (PLI), the Committee recommended that beneficiaries of the scheme should continue their production even after its conclusion for the benefit of the domestic economy.
- It further recommended that the government make it mandatory for beneficiaries to continue their production until at least 2030.
The PLI for automobile and auto component scheme provides incentives to overcome manufacturing disabilities for advanced automotive technology, with a budgetary outlay of ₹25,938 crore spread over five years from 2022-2023 to 2026-2027.

Key Takeaways:

A comprehensive national policy on electric vehicles incorporating the State-level and international best practices is needed to ensure a comprehensive and uniform growth of the EV sector.
The extension of the FAME-II scheme beyond March 31, 2024, by an additional two years is necessary to evaluate the effectiveness of the scheme and make necessary adjustments to promote the EVs.
The promotion of technologies such as flex fuel vehicles, Hydrogen ICE, and Hydrogen fuel cell vehicles alongside EVs and hybrid vehicles, and the preparation of a roadmap for setting up solar charging stations in a time-bound manner are essential to reduce dependence on electricity generated by using coal, in line with the government's green mobility objective.
Finally, making it mandatory for beneficiaries of the production-linked incentive (PLI) scheme to continue their production until at least 2030 is a step towards benefiting the domestic economy

Conclusion:

The recommendations made by the parliamentary panel on electric vehicles (EVs) are crucial for the growth and development of the EV sector in India.
These recommendations, if implemented, will not only promote the adoption of EVs but also lead to the development of a sustainable and environmentally friendly transportation sector in India.

Source: The Business Line

Mains Question:

Q. In your opinion, what steps should the government take to promote the adoption of alternative fuel vehicles in India? Discuss the challenges and opportunities in implementing such measures. (150 words).