New Delhi, Jul 3 (KNN) In anticipation of the upcoming Union Budget, India's electric vehicle (EV) industry is eagerly awaiting the unveiling of the government's third iteration of its EV promotion scheme.

However, this time, manufacturers are advocating for a more stable and predictable policy framework, a stark contrast to the abrupt termination of the previous subsidy program.

Amitabh Saran, CEO of Altigreen, a prominent electric three-wheeler manufacturer, emphasised the need for continuity in policy. "New changes are too sudden, especially for the automobile industry with its long lead times," Saran told ET. "We would want the new subsidy regime to last for at least two to three years to truly benefit the industry."

The EV sector's concerns stem from the recent history of government support programs. The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, initially launched in 2015, aimed to boost EV and hybrid vehicle adoption through subsidies that allowed manufacturers to offer lower prices.

Its successor, FAME-II, introduced in 2019, ran until March 2024 before being discontinued. This abrupt end has reportedly led to a significant slowdown in EV sales, according to the Federation of Automobile Dealers Associations.

Saran argues that the Indian EV market is not yet self-sufficient, stating, "Today, around 21 per cent of cargo vehicles and 9-10 per cent of passenger vehicles are electric. The market will need around two to three more years to come to a point where it can survive without subsidies."

In response to the industry's needs, the government introduced the Electric Mobility Promotion Scheme (EMPS) in March. This new initiative aims to support the adoption of electric two-wheelers and three-wheelers while fostering the development of a robust EV manufacturing ecosystem.

However, the subsidy offered under EMPS is approximately half of what was provided under FAME-II, raising concerns about its effectiveness in maintaining the growth momentum of the EV sector.

As the Union Budget approaches, the EV industry's call for a stable, long-term subsidy policy underscores the delicate balance between government support and market sustainability.

(KNN Bureau)