Tata Motors Request Government For Three-Year Extension Of EV Incentives

Tata Motors has urged the government to extend incentives for electric taxis for another three years, as well as include personal vehicles in the flagship demand support scheme, FAME.

Tata Motors, which controls more than 70 per cent of the local EV industry, wants New Delhi to assist in replicating an enabling environment similar to the one in China, which has vowed to support electric vehicle adoption until unit sales reach at least a fifth of all new cars sold, according to Economic Times.

“Globally, major economies (China, Germany) have continued to support EV adoption with demand subsidies until the achievement of at least 20 percent EV adoption,” Shailesh Chandra, Managing Director (MD) of Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, stated in a letter dated March 9, 2024.

“The Parliamentary Standing Committee on Industry had also recommended in 2023 that the Government broaden the scope and extend FAME by at least three more years to make the scheme more inclusive,” Chandra further stated in the letter, as per Economic Times.

Meanwhile, the Faster Adoption & Manufacturing of Electric Vehicles program’s second phase of assistance, or FAME 2, ends on March 31.

With around 83,000 units sold in 2023, electric automobiles accounted for 2.5 per cent of new vehicle sales in India. Last year, China sold 6.68 million battery-powered automobiles.

In the first two months of the year, New Energy Vehicles (NEVs, which include plug-in hybrids and battery electrics), accounted for over one-third of all vehicles sold in the country. According to estimates, China accounts for six out of every ten electric vehicle sales worldwide.

To encourage faster adoption of the green powertrain, Tata Motors has requested the government to continue supporting electric taxis with a Rs 10,000/kWh battery size incentive for the next three years, as well as to include personal vehicles in future incentive schemes to promote wider adoption.

Currently, the government provides subsidies of Rs 10,000 per kWh to taxi operators for up to 30,000 vehicles under FAME 2. While the number of electric taxis has increased year after year to a total of 16,000, sales remain below the government’s aim of 30,000 battery-powered taxis.

In the letter, the Managing Director (MD) of Tata Passenger Electric Mobility and Tata Motors Passenger Vehicles, Chandra stated that there is ‘substantial money’ left over from FAME II’s initial allotment for taxis, as per the publication.