Govt Allocates Rs 14,335 Crore for Electric Vehicle Promotion Schemes

The Union Cabinet has approved two significant schemes with a combined budget of Rs 14,335 crore to boost the adoption of electric vehicles (EVs), including buses, ambulances, and trucks. The schemes are PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) with Rs 10,900 crore over two years and PM-eBus Sewa-Payment Security Mechanism (PSM) with Rs 3,435 crore.

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Information and Broadcasting Minister Ashwini Vaishnaw stated that the PM E-DRIVE Scheme aims to reduce pollution. It includes subsidies worth Rs 3,679 crore for electric two-wheelers (e-2Ws), three-wheelers (e-3Ws), ambulances, trucks, and other emerging EVs. The scheme will support 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses.

Subsidies and Incentives

The Ministry of Heavy Industries (MHI) will introduce e-vouchers for EV buyers to avail demand incentives under the scheme. When purchasing an EV, an Aadhaar-authenticated e-Voucher will be generated for the buyer through the scheme portal. Additionally, Rs 500 crore is allocated for deploying e-ambulances to ensure comfortable patient transport.

The PM E-DRIVE also allocates Rs 4,391 crore for procuring 14,028 e-buses by state transport undertakings and public transport agencies. CESL will manage demand aggregation in nine cities with populations exceeding 40 lakh: Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune, and Hyderabad. Intercity and interstate e-buses will also be supported in consultation with states.

Addressing Range Anxiety

To address range anxiety among EV buyers, the scheme promotes installing public charging stations (EVPCS). These stations will be set up in cities with high EV penetration and selected highways. The plan includes installing 22,100 fast chargers for electric four-wheelers (e-4Ws), 1,800 fast chargers for e-buses, and 48,400 fast chargers for e-2W/3Ws. The total outlay for EVPCS is Rs 2,000 crore.

Trucks are a major contributor to air pollution. The PM E-DRIVE will promote deploying e-trucks in India with Rs 500 crore allocated for incentivising them. This initiative aims to support sustainable growth and advance the country's electric vehicle movement.

PM-eBus Sewa-Payment Security Mechanism

The PM-eBus Sewa-Payment Security Mechanism (PSM) scheme has a budget of Rs 3,435 crore to support the procurement and operation of over 38,000 electric buses from FY 2024-25 to FY 2028-29. This scheme ensures the operation of e-buses for up to 12 years from deployment.

Currently, most buses operated by Public Transport Authorities (PTAs) run on diesel or CNG, which negatively impacts the environment. In contrast, e-buses are eco-friendly and have lower operational costs. However, PTAs face challenges due to the high upfront cost of e-buses and lower revenue from operations.

To mitigate these challenges, PTAs will induct e-buses through Public Private Partnership on a Gross Cost Contract (GCC) model. Under this model, PTAs do not pay the upfront cost; instead, OEMs/operators procure and operate e-buses with monthly payments from PTAs. However, OEMs/operators are hesitant due to concerns about payment defaults.

The PSM scheme addresses this issue by ensuring timely payments to OEMs/operators through a dedicated fund. If PTAs default on payments, CESL will make necessary payments from scheme funds and later recoup them from PTAs/state/UTs.

Earlier government initiatives like Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) schemes supported around 16 lakh electric vehicles across two phases. This new programme aims to further accelerate India's transition towards sustainable transportation solutions.