An electric vehicle (EV) is one that operates on an electric motor, instead of an internal-combustion engine that generates power by burning a mix of fuel and gases. Therefore, such as vehicle is seen as a possible replacement for current-generation automobile, in order to address the issue of rising pollution, global warming, depleting natural resources, etc. Though the concept of electric vehicles has been around for a long time, it has drawn a considerable amount of interest in the past decade amid a rising carbon footprint and other environmental impacts of fuel-based vehicles.
In India, the first concrete decision to incentivise electric vehicles was taken in 2010. According to a Rs 95-crore scheme approved by the Ministry of New and Renewable Energy (MNRE), the government announced a financial incentive for manufacturers for electric vehicles sold in India. The scheme, effective from November 2010, envisaged incentives of up to 20 per cent on ex-factory prices of vehicles, subject to a maximum limit. However, the subsidy scheme was later withdrawn by the MNRE in March 2012.
In 2013, India unveiled the 'National Electric Mobility Mission Plan (NEMMP) 2020' to make a major shift to electric vehicles and to address the issues of national energy security, vehicular pollution and growth of domestic manufacturing capabilities. Though the scheme was to offer subsidies and create supporting infrastructure for e-vehicles, the plan mostly remained on papers. While presenting the Union Budget for 2015-16 in Parliament, then finance minister Arun Jaitley announced faster adoption and manufacturing of electric vehicles (FAME), with an initial outlay of Rs 75 crore. The scheme was announced with an aim to offer incentives for clean-fuel technology cars to boost their sales to up to 7 million vehicles by 2020.
In 2017, Transport Minister Nitin Gadkari made a statement showing India’s intent to move to 100 per cent electric cars by 2030. However, the automobile industry raised concerns over the execution of such a plan. The government subsequently diluted the plan from 100 per cent to 30 per cent.
In February 2019, the Union Cabinet cleared a Rs 10,000-crore programme under the FAME-II scheme. This scheme came into force from April 1, 2019. The main objective of the scheme is to encourage a faster adoption of electric and hybrid vehicles by offering upfront incentives on purchase of electric vehicles and also by establishing necessary charging infrastructure for EVs.