Use 50% local content to avail Electric Vehicles incentive: Government

To promote local manufacturing of electric vehicles in India, the government has put localisation content limit for EVs makers to avail incentive benefit under the FAME II Initiative.

The minimum local content limit is 50 percent for electric four-wheelers electric two-wheelers, electric three-wheelers, and e-rickshaws whereas in case of buses the limit is 40 percent, according to sources who attended a meet of the Department of Heavy Industry on Wednesday.

The norms will be applicable from April 1.  Around 10,00000 electric two-wheelers, 500,000 three-wheelers, 55,000 two-wheelers, and 7,000 buses will be included in the new phase of the scheme.

Last week, the proposed incentive plans by the govt were widely reported by media. As per the report, about 60,000 electric cars in India may get a subsidy of up to Rs 2.5 lakh whereas hybrid cars will get Rs 20,000 that are brought over the next three years.

A major part of the subsidy funds will be allocated to electric two-wheelers, three-wheelers such as e-rickshaw and buses used for public transport. The electric buses subsidy would be up to Rs 50-60 lakh.

The subsidy calculation- Rs 10,000 per KWh for all vehicles and Rs 20,000 per KWh for buses, will be linked to the battery capacity of the respective vehicles.

In total, about Rs 8500-8800 will be extended to consumers to promote widespread utilisation of EVs. About Rs 1200 crore has been set aside for setting up changing infra and build awareness. Only lithium-ion battery fitted vehicles registered with appropriate authorities will be eligible for incentives.

Under FAME II, for four wheelers, only fleet operators will be able to avail of incentives, individual buyers will not be accorded any subsidies, said an ET report quoting a govt official.

To encourage local component use in EV making, the government had cut down customs duty on electric vehicle parts to 10-15 per cent from 15-30 per cent in January.

The government has been trying to maximise the use of EV to achieve complete electrification by 2030 in India.