NEAP = New Electric Automotive Policy

Context :

Skewed norms act as roadblock for FAME 2 scheme : EV body / Business Line – 07 Jan

Extract :

Ø “We urge the government to come up with corrective measures that will help the industry achieve the envisaged target of 10 lakh E2Ws,” said Sohinder Gill, Director General, SMEV [sohinder@gmail.com ]

Ø “The FAME 2 scheme had some good points and laudable objectives but came with so many strings attached — most of them introduced prematurely or unnecessarily — that led to the achievement of only 4 per cent of the stated targets. The scheme could not attract customers to shift from the polluting petrol bikes to E2Ws, mainly because the preconditions and qualification criteria of FAME 2 made the bikes unaffordable to the mass market customer despite the subsidy,” Gill said.

Ø To match the criteria of speed and range under FAME 2, the vehicle cost is going up, which is beyond the common man’s budget, he said.

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Dear Shri Gadkariji,

I urge you to transform FAME to NEAP ( New Electric Automotive Policy ) . When NEAP gets implemented, there will be a dramatic drop in the selling prices of Electric Vehicles as shown in following table.

Our entire strategy should be to enable the manufacturers to reduce their costs, so much that the EV start selling for less than the prices of comparable Petrol / Diesel vehicles !

When that happens, there will be no need to offer any subsidy !

Type of E Vehicle / Battery Capacity (KWh)	Target Number ( 3 YR )	Current EV Price (Rs ) for subsidy eligibility	NEAP will help bring down price to ( Rs L )- before subsidy
Buses	7,090	2 crore	50
Cars ( Hybrid ) / 15 - 25	20,000	15 lakh	-
Cars ( Electric ) / 15 - 25	35,000	15 lakh	7
3 Wheelers / 5 - 10	500,000	5 lakh	3
2 Wheeler / 2 – 4	1,000,000	1.5 lakh	1

Almost 2 years ago, in my following blog ( sent as e mail to Cabinet Ministers / MPs / NITI Aayog etc ), I had listed what was WRONG with FAME 2 , - and how it should be modified to enable us to reach EV targets :

Ø FAME II > FAME III > FAME IV…………… [ 05 Mar 2019 ]

Extract :

What , if any , is the shortcoming of just announced FAME II ?

# It focuses solely on “ Incentivizing the Buyers “ through subsidies

# There are no “ Incentives “ for the vehicle manufacturers to ramp up

production or commercialize “ cost reducing “ technologies, especially in

the matter of Lithium-ion batteries which constitute up to 40 % of EV

ex- factory price

# There are no “ dis-incentives “ for manufacture / sale / purchase of Petrol –

Diesel vehicles

# Linking the subsidy amounts with battery size is not the right method . In

fact a vehicle with a smaller size battery, but giving same performance (

speed – range – charging time etc ) as a vehicle with a bigger battery,

should be rewarded with higher subsidy !

Efficient use of input resources must be encouraged

# There is no directive with regard to scrapping of old ( more than 10 years )

petrol / diesel vehicles

What would you recommend next ?

FAME III ( Apr 22 - Mar 26 ) – 4 years

To avoid repetition, I am not reproducing my detailed / specific suggestions

listed in my blog / e-mail, under each of the following headings :

Suggestions in respect of :

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[ A ] MANUFACTURERS

( A.1 ) Policy Instrument > Corporate Income Tax for Incentivizing the

manufacturers of Batteries

( A.2 ) Abolish Corporate Income Tax ( for 10 years ) for the entire E

Mobility Eco-System

( A.3 ) Incentivizing the E Vehicle manufacturers

( A.4 ) Dis-incentivize manufacturers for production of Petrol / Diesel

vehicles

( A.5 ) Incentivizing manufacturers to get into “ Recycling of Old Vehicles “

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[ B ] BUYERS

( B.1 ) Incentivize for purchase of E Vehicles – especially, leasing of buses

( B.2 ) Incentivize Retro-fitting of old Petrol / Diesel vehicles ( non-compliant

with BS VI norms )

( B.3 ) Incentivize to switch-over to E Bikes

( B.4 ) Policy Instrument > Taxing all Vehicles based on their “ Harm

Quotient “ for environment

Dis-incentivize purchase of Petrol / Diesel vehicles

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[ C ] GOVERNMENT

( C.1 ) P0licy Instrument > Wet Leasing [ Thank You , Shri

Jaitleyji / 25 Dec 2018 ]

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[ D ] PASSENGERS OF PUBLIC TRANSPORT ( Non-Vehicle Owners )

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[ E ] SOLAR POWER for ELECTRIC VEHICLES

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Dear Shri Nitin Gadkariji,

For long, I have admired you for your VISION and OUT-OF-THE-BOX / BOLD thinking

Recently, Shri Saurabh Patel ( Energy Minister– Gujarat ) displayed similar bold thinking while announcing the NEW SOLAR ENERGY POLICY [ NSEP ], for Gujarat