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    FAME scheme: Despite govt efforts, electric vehicles' adoption is low, says Pawan Goenka

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    FAME scheme: Despite govt efforts, electric vehicles' adoption is low, says Pawan Goenka

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    In a bid to increase India’s EV adoption, the central government has extended the FAME or Faster Adoption and Manufacturing of Hybrid and Electric vehicle scheme by two years. Along with that, now at least 18 states have their own electric vehicle policies. To discuss this, CNBC-TV18’s Parikshit Luthra spoke to GR Arun Kumar, Group CFO, Ola; Sandeep Bangia, Head - EV Charging of Tata Power; and Pawan Goenka, Head - SCALE Committee, Former MD at M&M.

    In a bid to increase India’s EV adoption, the central government has extended the FAME or Faster Adoption and Manufacturing of Hybrid and Electric vehicle scheme by two years. Along with that, now at least 18 states have their own electric vehicle policies.
    The current allocation of Rs 10,000 crore will continue till 2024 as only 0.5 percent of it has been used so far.
    The FAME 2 scheme has also been restructured and subsidies on electric two-wheelers have been hiked from Rs 10,000 per kilo-watt hour to Rs 15000 per kilo-watt hour.
    Energy Efficiency Services Limited (EESL) has been mandated to procure 3 lakh electric three-wheelers and 4,500 buses.
    But, it seems that state governments will really drive India's EV story. So far 12 states including Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi, Tamil Nadu, Telangana, Uttar Pradesh, Gujarat, Odisha and Meghalaya have approved EV policies and 6 others are ready with draft proposals. Gujarat is the most recent state to join the EV bandwagon.
    There is also a 25 percent capital subsidy on EV charging stations with an aim to setup 528 charging stations in India.
    Maharashtra is set to revise its EV policy, which is awaiting cabinet approval. They are targeting 10 percent electric vehicles in the state till 2025 and 10 percent electric buses in the next 2-3 years. The focus of the scheme would be to increase EV adoption in Mumbai, Pune, Nagpur, Nashik and Aurangabad.
    But there are some roadblocks to EV adoption. One of course is the lack of awareness and the low number of EVs on roads. Only 1.3 percent of the total vehicles in the country are EVs.
    There are only about 1,800 charging stations in India and the country may need up to 4 lakh EV charging stations for 20 lakh electric vehicles by 2026.
    Lack of easy low cost financing is another hurdle in the way of EV adoption. Few banks offer loans on EVs and those availing them have to make higher down payments, pay higher interest rates and have shorter repayment periods compared to conventional vehicle.
    To discuss this, CNBC-TV18’s Parikshit Luthra spoke to GR Arun Kumar, Group CFO, Ola; Sandeep Bangia, Head - EV Charging of Tata Power; and Pawan Goenka, Head - SCALE Committee, Former MD at M&M.
    Pawan Goenka said, “What the Government of India has done in the FAME scheme in the last week by extending it by two years is a step that was almost must because the FAME scheme in the first phase hasn’t really taken off in terms of providing impetus to more electric vehicles. What is more encouraging is the fact that more and more states are coming on board and announcing fairly aggressive EV policy.”
    He added, “What is disappointing for me though that in spite of all the efforts that have been put in by the government in terms of given the fiscal incentives for electric vehicles, the electric vehicles population is nowhere near what I would have thought we would have by 2021. Of course COVID has played a role in it but keeping that aside we should have been much further ahead than what we are.”
    Arun Kumar said, “Our plans are absolutely on track and we are coming up on the world’s largest two-wheeler park, we called it the 'Future Factory'. We will launch sometime during July and start delivering these from August. We are highly thankful to the government for coming up with the ecosystem of incentives.”
    For full interview, watch accompanying video...
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