New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, Wednesday approved two schemes—PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme and PM-eBus Sewa-Payment Security Mechanism (PSM)—with a total outlay of Rs 14,335 crore to boost adoption of electric vehicles in the country.
PM E-DRIVE is set to replace the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme, with an outlay of Rs 10,900 crore over a period of two years. For the second scheme, Rs 3,435 crore has been allocated.
Announcing the decisions post the Cabinet meeting, Union Minister Ashwini Vaishnaw said that the PM E-DRIVE scheme has been approved with the aim of curbing pollution and ensuring sustainable development. He added that the new scheme will incorporate learnings from the previously launched FAME I and FAME II programmes. About 16 lakh electric vehicles were supported under those initiatives.
“The scheme promotes mass mobility by supporting means of public transportation. The primary objective of the PM E-DRIVE scheme is to expedite the adoption of EVs by providing upfront incentives for their purchase, as well as by facilitating the establishment of essential charging infrastructure for EVs,” said the government in its official statement.
“This initiative of the government is poised to address concerns regarding environmental pollution and fuel security as well as to make significant progress in promoting sustainable transportation solutions. This scheme, along with its PMP (Phased Manufacturing Programme), shall spur investment in the EV sector and associated supply chain,” it added.
“The scheme shall create significant employment opportunities along the value chain. There will also be employment generation through manufacturing and establishment of charging infrastructure.”
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Incentivising electric vehicles
Under this scheme, subsidies or demand incentives worth Rs 3,679 crore will be given to incentivise electric two-wheelers and three-wheelers, e-ambulances, e-trucks, and other emerging electric vehicles. The scheme will support 24.79 lakh e-2Ws, 3.16 lakh e-3Ws and 14,028 e-buses.
“Ministry of Heavy Industries is introducing e-vouchers for EV buyers to avail demand incentives under the scheme. At the time of purchase of the EV, the scheme portal will generate an Aadhaar authenticated e-Voucher for the buyer. A link to download the e-voucher shall be sent to the registered mobile number of the buyer,” the statement read.
The e-voucher will be signed by the buyer as well as the dealer, which will be uploaded on the PM E-DRIVE portal. The signed e-voucher will be essential for OEMs (original equipment manufacturers) to claim reimbursement of demand incentives under the scheme.
The scheme also allocates Rs 500 crore for the deployment of e-ambulances. “This is a new initiative of Govt of India to promote the use of e-ambulance for a comfortable patient transport. The performance and safety standards of e-ambulances will be formulated in consultation with MoHFW (Ministry of Health and Family Welfare), MoRTH (Ministry of Road Transport and Highways) and other relevant stakeholders,” the statement said.
The scheme also provides Rs 4,391 crore for procurement of 14,028 e-buses by state transport undertakings/public transport agencies. The demand aggregation, according to the statement, will be done by CESL (Convergence Energy Services Limited) in nine cities with over 40 lakh population—Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune and Hyderabad. Intercity and interstate e-buses will also be supported in consultation with states.
“Trucks are a major contributor to air pollution. The scheme will promote the deployment of e-trucks in the country. Rs 500 crore has been allocated for incentivising e-trucks. Incentives will be given to those who have a scrapping certificate from MoRTH approved vehicles scrapping centres,” the government has said.
The scheme also aims to address EV buyers’ range anxiety by promoting the installation of electric vehicle public charging stations (EVPCS) in select cities with high EV penetration and on select highways, with an outlay of Rs 2,000 crore. It proposes the installation of 22,100 fast chargers for electric four wheelers, 1,800 fast chargers for e-buses and 48,400 fast chargers for electric two wheelers/three wheelers.
Additionally, Rs 780 crore has been approved to modernise testing agencies under the aegis of Ministry of Heavy Industries to equip them to deal with new and emerging technologies to promote green mobility.
Deployment of electric buses
Meanwhile, the PM-eBus Sewa PSM scheme will support deployment of more than 38,000 electric buses (e-Buses) for five years from FY 2024-25 to FY 2028-29 and operation of e-buses for a period of up to 12 years from the date of deployment.
Currently, the majority of buses operated by Public Transport Authorities (PTAs) run on diesel/CNG, causing adverse environmental impact, while e-buses are environment friendly and have lower operational cost, the government statement said.
“However, it was anticipated that Public Transport Authorities (PTAs) would find it challenging to procure and operate e-buses because of their high upfront cost and lower realisation of revenue from operations,” it added.
It further explained that to address the high capital cost of e-buses, PTAs induct buses through Public Private Partnership on Gross Cost Contract (GCC) model, wherein they are not required to pay the upfront cost of the bus. Instead, OEMs/operators procure and operate e-buses for them for monthly payments. However, OEMs/operators are hesitant to engage in this model due to concerns about potential defaults on payments.
“The scheme addresses this concern by ensuring timely payments to OEMs/operators through a dedicated fund. In case of default of payments by PTAs, CESL, the implementing agency, shall make necessary payments from the scheme funds, which will be later recouped by the PTAs/State/UTs,” the statement read, adding that this initiative seeks to facilitate adoption of e-buses by encouraging private sector participation.
The scheme aims at significant reductions in greenhouse gas emissions and reduction in consumption of fossil fuel.
Shailesh Chandra, president of automobile industry body, Society of Indian Automobile Manufacturers (SIAM), and Managing Director, Tata Motors Passenger Vehicles & Tata Passenger Electric Mobility, said that these decisions will “undoubtedly” help accelerate the adoption of electric vehicles (EVs) across the country, making clean and green transportation more accessible to all.
“This forward-thinking initiative reflects the government’s unwavering support for India’s transition to electric mobility, fostering innovation and investment within the sector. We believe this scheme will not only enhance the growth of the EV ecosystem, but also strengthen India’s leadership in the global movement towards environmental sustainability,” he said.
(Edited by Mannat Chugh)