The government has taken another step to help India transition more smoothly to electric vehicles. This time, the step is not as drastic but involves extending a pre-existing policy. They have announced a two-month extension to the Electric Mobility Promotion Scheme 2024 (EMPS 2024). The deadline for this policy is not September 30, instead of the previous date of July 31. The outlay of the scheme has also been increased to 778 crore from 500 crore.
What is EMPS?
EMPS 2024 was launched on April 1, 2024, and aims to increase electric vehicle sales throughout the country. Its primary focus lies on two-wheelers and three-wheelers, including e-rickshaws and e-carts. The scheme aims to aid the government's green initiatives and promote the growth of the EV manufacturing ecosystem in the country. In EMPS 2024, a subsidy of Rs 5,000 is provided for every kWh of battery capacity in an electric two-wheeler. For instance, an electric two-wheeler with a 2 kWh battery would qualify for a Rs 10,000 subsidy. However, the maximum subsidy available for electric two-wheelers is capped at Rs 10,000.
New Targets
According to the new targets, EMPS 2024 aims to support 5,60,789 electric vehicles. Out of these, 500,080 will be electric two-wheelers and 60,709 electric three-wheelers. The program focuses more on affordable and eco-friendly public transportation, particularly for commercially registered vehicles. That said, privately or corporate-owned registered electric two-wheelers are also eligible for incentives.
Impacts of Extension
The extension and increased outlay of the scheme will come with much-needed support from the government for the EV makers. They have been anticipating such a move since the end of the FAME II program. That being said, experts in the industry believe that the core problems of the industry are still present. This encompasses the necessity for more flexible financing options from banks and the challenge of attracting traditional two-wheeler buyers beyond early adopters. Furthermore, technological challenges, such as the intricacies of electrifying motorcycles, continue to influence the pace of EV adoption.
Industry Predictions
The two-wheeler industry is hopeful for a 7-9 per cent steady growth rate in the upcoming financial year (FY25), driven by rising EV sales bolstered by the government's EMPS 2024 initiative. In FY23, the electric vehicle segment experienced significant growth, reaching 730,000 units, making up 4.54 percent of total two-wheeler sales. This marks a substantial year-on-year increase of 188 percent.
Do you think we will see a growth in electric 2-wheeler and 3-wheeler sales with this extension?
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