The electric vehicle (EV) industry is excited about the Indian government’s newly launched 'PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) Scheme'. This initiative, which was approved by the Union Cabinet with an outlay of Rs 10,900 crore, further aimed to boost electric mobility across the country.
The scheme comes at a critical time for the EV sector, following the expiration of the FAME-II scheme, which had played a major role in the growth of electric vehicles.
Ola and VECV Leaders Praise the Initiative
Several industry leaders have welcomed the scheme. Bhavish Aggarwal, founder of Ola, stated that the PM E-Drive scheme will provide the necessary momentum for the EV industry to scale up, driving a smooth transition from internal combustion engines (ICE) to EVs.
Vinod Aggarwal, MD and CEO of VE Commercial Vehicles, also praised the initiative, highlighting that it will accelerate the adoption of electric two-wheelers, three-wheelers, trucks, buses, and even ambulances. He emphasized the scheme’s focus on expanding the charging infrastructure, which includes plans to install 88,500 EV chargers nationwide.
Replacing FAME-II: What’s different?
The PM E-Drive scheme is set to replace the FAME-II subsidy, which was instrumental in the early adoption of EVs. Under the new scheme, Rs 3,679 crore has been allocated for subsidies on two-wheelers, three-wheelers, e-ambulances, and other EV categories.
The new scheme also allocates Rs 500 crore specifically for the deployment of e-ambulances, a first-time initiative by the government. Additionally, the scheme includes a budget for setting up public charging stations, addressing range anxiety for EV owners.
Concerns from the industry: Impact of reduced subsidies
Not all industry reactions have been completely positive. Tarun Mehta, co-founder and CEO of Ather, expressed concerns over the reduction in subsidies, which has already led to price increases for electric two-wheelers. Ather noted in its draft red herring prospectus (DRHP) that the cut in government incentives, which started in June 2023, had led to a price hike of Rs 20,434 to Rs 30,285 for its two-wheelers.
Ather's DRHP also warned that further reductions in incentives could slow the sector’s growth, making EVs less competitive compared to traditional ICE vehicles.
Battery swapping and other issues
Some industry leaders, like Vivekananda Hallekere, co-founder of Bounce, have voiced disappointment over the lack of provisions for battery swapping in the new scheme. While the government’s focus on testing and standardization is appreciated, battery swapping remains a critical issue that the industry hopes will be addressed in the future.
Boosting charging infrastructure
The PM E-Drive scheme focuses significantly on expanding the EV charging network, which had been a major challenge in the EV ecosystem. The government has proposed installing 22,100 fast chargers for four-wheelers, 1,800 fast chargers for buses, and 48,400 fast chargers for two-wheelers and three-wheelers across high-penetration cities and key highways.
With an outlay of Rs 2,000 crore for these charging stations, the scheme aims to make EV adoption more practical for everyday users.
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