In a swift turnaround, the government’s Electric Mobility Promotion Scheme (EMPS) has achieved 60 per cent of its revised target, supporting 334,260 vehicles out of the 560,000-unit goal as of August 15. This significant progress follows a slow start, with less than 10 per cent of the target achieved as of July 15 since the scheme was launched on April 1. Government sources attribute the turnaround to the onboarding of new players and the addition of more models by existing companies, which drove higher outlay.
“Today, 31 original equipment manufacturers (OEMs) are enrolled in the programme, offering 168 models. The onboarding process was initially slow but thorough as we implemented strict qualification criteria. However, we are now on track to exceed even the revised target,” said a senior government official.
The turnaround over the past month is noteworthy as the 60 per cent achievement is based on the revised target. The Ministry of Heavy Industries (MHI) has extended the EMPS, which was initially scheduled to expire on July 31, by two months till the end of September. The target of the scheme has been raised from 372,215 units to 560,000 units, and the total financial outlay has been revised from Rs 500 crore to Rs 778 crore.
“Compared to our initial target, we have achieved almost 90 percent of our target for vehicle support,” said another official, requesting anonymity.
Applications worth 27 per cent, or Rs 214 crore, of the Rs 778 crore allocated under the scheme have been submitted. Compared to the previous disbursement, this represents over 42 per cent of the funds utilised.
Major OEMs participating in the scheme include Ather Energy, Ola Electric, TVS, Hero MotoCorp, Kinetic, Revolt, Mahindra and Piaggio.
In April, 13 electric two-wheeler (e2W) and 10 electric three-wheeler (e3W) companies were onboarded under EMPS. In May, the scheme added only one e2W and four e3W companies. In June, five e2W companies were onboarded and in July, one e3W company. Three OEMs (Bajaj, Kinetic and Godawari) are participating in both e2W and e3W categories.
In July, EV sales in the country were nearly 28 per cent higher than the previous month and the highest for a month in the current financial year, according to Vahan data from the Ministry of Road Transport and Highways (MoRTH). Looking ahead to the calendar year 2024, EV sales have crossed one million in the first seven months.
“The surge in EV sales is also due to the improved distribution of claims by the government. The scheme has helped the sector to reach a new sales record,” said one of the officials cited above.
According to industry experts, July sales were boosted by widespread discounting and customers rushing to buy. Both factors can be attributed to the impending expiration of EMPS 2024 on July 31.
Sales declined following the expiry of FAME-II as incentives under the new EMPS were significantly reduced. Under EMPS, incentives for e2Ws were reduced from Rs 66,000 to Rs 10,000, and for e3Ws from Rs 1,11,505 to Rs 25,000. Also, while FAME-II included incentives for buses and cars, EMPS focuses solely on e2Ws and e3Ws.
SLOW AND STEADY
Slow start: Less than 10% of vehicle sales target had been achieved by July 15.
The turnaround: 60% of the revised EMPS target was reached on August 15.
Factors of change: incorporation of new OEMs and addition of more models.
OEMs on board: 31 entrants including Ather, Ola, TVS and Hero, offering 168 models.
Extension of the plan: Originally scheduled to end on July 31, it has now been extended until September 30.
First published: August 20, 2024 | 10:46 PM IS
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