The Society of Manufacturers of Electric Vehicles whose members comprise of electric four-wheeler, three-wheeler, buses, two-wheeler and auto component manufacturers has been instrumental in the formulation of the FAME scheme which is the real turbocharger to the electromobility trend in India. Speaking to APF, Sohinder Gill, CEO, Hero Eco and Director of Corporate Affairs, SMEV, talks about what kind of policies and business models are needed to incentivise and provide a good growth platform for EVs.
What is the role of SMEV in the automotive industry?
SMEV is the registered association representing Indian manufacturers of electric vehicles (EV) and electric vehicle components. Since our inception, we have worked with the sole aim to empower the EV industry and increase EV awareness across India to achieve green mobility. We help assist central and various state governments to formulate EV policies and processes as a step to strengthen the entire EV ecosystem.
Our vision is to innovate and tackle a host of challenges in the EV space and come out with real solutions to achieve faster adoption of EVs in the country. Our core focus is to achieve electric mobility across the nation by guiding and providing other players with the right tools to deliver effective EVs to the Indian consumers.
How has SMEV’s involvement shaped the electromobility scene in India?
We closely worked with Department of Heavy Industries (DHI) and successfully assisted the government in formulating the FAME India Scheme (NEMMP 2020), followed by a series of other active implementations and achievements.
We have helped state governments like Telangana, Maharashtra, Punjab, Uttar Pradesh and Andhra Pradesh Karnataka in the framing of state EV policy. At present, we are working with Niti Aayog and are a committee member of the Department of Ministry of Power in formulation of EV guidelines for the upcoming future.
In the past, we had helped bringing down the value added tax (VAT) in many states like Maharashtra, Delhi, Haryana from 12.5 per cent to five per cent. In the state of Tamil Nadu we reduced the VAT to four per cent. The states of Madhya Pradesh, Chhattisgarh and Karnataka, and even union territory Chandigarh, experienced a total exemption due to our efforts. The exemptions will now be translated to the GST.
In addition, we had successfully introduced MNRE subsidy and DPCC subsidy to India back in 2012.
Other than subsidies, what can serve as a better incentive for the faster adoption of EVs in India?
As of now, bringing this topic into dialogue across India would be the prime step. Coming out with various awareness programs on EVs will cut a deal in largely educating the consumers. Also, apart from incentives, a long term policy of about five to six years seems to be the need of the hour as it would act as a catalyst to increase EV adoption in India. Adding to it would be providing customers with loans from the local banks at marginal rates. Next would be cutting down the GST rates on these vehicles keeping affordability in mind. Then mandating EVs to be used by the companies engaged in delivery business (courier service providers and food delivery etc.) will also give a push to the EV space. With all such incentives, R&D will always play a critical role as innovation is one of the significant aspects of this segment. It will further give a boost to the indigenisation of the product in the country.
The FAME policy will complete its second phase in 2020. What will be the goals outlined for it and what are the plans ahead?
We are expecting that the government will extend the FAME Scheme with a new name. The objective of FAME I was to find out the learning and implement it in the upcoming FAME policy. We have submitted our recommendations which we have observed in the last three years that need to be focused in the coming future. We have noticed that there is a huge demand for low-speed scooters, which is now constituting to around 95 per cent of the EV market. To sustain the momentum, the government can continue with the already existing subsidies on these products till 2-3 years. In that much time the prices of advanced batteries are expected to reduce which will help these manufacturers to switch gradually to advanced battery technology.
Public transport constitutes a very low percentage of overall EV penetration and hence the government should focus more on low-hanging fruits that have potential to accelerate the growth of EVs in India. For instance, lead battery scooters have the maximum presence and demand in this space. Thus, the top four segments that can spawn real outcomes are electric two-wheelers, electric rickshaws, fleet cars and electric buses.
Also, the new scheme would have a specific role and responsibility defined for various concerned ministries. Each ministry will be given the responsibility based on their expertise to implement with a definitive timeline. It will eventually help in building EV ecosystem and benefit a large number of customers.