Government's Electronic Vehicle Initiative Launches New Plan Bolstering Homegrown Production of Electric Vehicle Parts
The Indian government has announced a new E-Drive scheme, aimed at promoting local manufacturing of electric vehicles (EVs) and their components. The details of the scheme were published by ET Auto.
Under the new E-Drive scheme, manufacturers who source locally manufactured components will receive financial support. However, there is no domestic value addition mandate for manufacturers to receive financial support under the new scheme. This means that suppliers are allowed to import parts for the components.
To ensure local manufacturing of EV components, a Phased Manufacturing Program (PMP) will be implemented. Companies seeking subsidies under the E-Drive scheme will have six months to comply with the PMP from the date of scheme notification.
The key companies participating in the local manufacturing program for electric vehicle components and eligible for subsidies under the government's new E-Drive program include Schaeffler, ZF Friedrichshafen AG, and Elektrobit. These companies are involved in electric powertrain solutions, e-mobility technologies, and automotive software development related to electrification.
In an effort to prevent misuse of subsidies, a biannual inspection clause will be implemented to monitor EV manufacturers under the new PM E-Drive scheme. This follows reports of many manufacturers selling imported vehicles and wrongly availing of subsidies under the previous Electric Mobility Promotion Scheme (EMPS) 2024.
The new PM E-Drive scheme will absorb the Electric Mobility Promotion Scheme (EMPS) 2024. The subsidy on electric two-wheelers will be halved to ₹5,000 per vehicle in the financial year 2025-26, while the subsidy on electric three-wheelers will be capped at ₹25,000 per vehicle.
The official's statements about the E-Drive scheme were also published by ET Auto. The new PM E-Drive scheme does not specify a domestic value addition mandate for manufacturers to receive financial support. Local manufacturing of components is mandatory to gain benefits from the E-Drive scheme.
In summary, the new PM E-Drive scheme is aimed at promoting local manufacturing of EVs and their components. The scheme will absorb the Electric Mobility Promotion Scheme (EMPS) 2024, and companies seeking subsidies under the new scheme will have six months to comply with the PMP from the date of scheme notification. The scheme will also introduce a biannual inspection clause to monitor EV manufacturers and prevent misuse of subsidies.
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