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Government tightens Localisation Norms for Electric Vehicles

Government tightens Localisation Norms for Electric Vehicles

India, March 7, 2019 : The central government has placed firm localisation norms for the automotive industry to avail of incentives under the second  phase of the FAME (Faster Adoption and Manufacturing of hybrid and Electric Vehicles) II Initiative to promote local manufacturing of electric vehicles. Two persons who attended a Wednesday meeting of policymakers and industry stakeholders under the aegis of the Department of Heavy Industry told ET.

In order to claim the FAME II incentives, vehicle makers have to ensure minimum localisation content of 40% on ex-factory price of the vehicle in case of buses and 50% for all other categories of vehicles (electric two wheelers, electric three-wheelers, electric four-wheelers and e-rickshaws) to qualify for benefits under the scheme.

Automobile companies have to meet the specified localisation requirements from April 1, 2019, to avail of benefits under FAME II.

On the whole, direct subsidies to the tune of Rs 8,800 crore will be extended to consumers to encourage widespread utilisation of electric two-wheelers, three-wheelers, four-wheelers and buses.

According to the sources, only lithium-ion battery fitted vehicles registered with appropriate authorities will be eligible for incentives. 

An additional Rs 1,200 crore has been earmarked to set up charging infrastructure and build awareness among consumers about electric vehicles and emobility. The government last week approved Rs 10,000 crore to implement the second phase of FAME India Initiative for a period of three years starting April 1.