ELECTRIC VEHICLES AND FAME SCHEMES

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 ELECTRIC VEHICLES AND FAME SCHEMES

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• What are EVs: An electric vehicle (EV) is one that operates on an electric motor, instead of an internal-combustion engine (ICE) that generates power by burning a mix of fuel and gases. Such EVs are seen as a possible replacement for current-generation automobiles, to address the issue of rising pollution, global warming, depleting natural resources, etc. 
• History: EVs first came into existence in the mid-19th century, when electricity was among the preferred methods for motor vehicle propulsion, and in the 21st century, EVs saw a resurgence due to technological developments, and an increased focus on renewable energy due to climate change concerns. 
• Powering and types: An EV can be powered through a collector system by electricity from off-vehicle sources, or may be self-contained with a battery, solar panels or an electric generator to convert fuel to electricity. EVs are everywhere - road and rail vehicles, surface and underwater vessels, electric aircraft and electric spacecraft.
• Varieties of EVs: Just like the variety of technologies available in conventional fossil-fuel vehicles, plug-in electric vehicles (EVs) have different capabilities that can accommodate different drivers’ needs. A major feature of EVs is that drivers can plug them in to charge from an off-board electric power source. This distinguishes them from hybrid electric vehicles, which supplement an internal combustion engine with battery power but cannot be plugged in. (some models allow that)
• Two basic types: There are two basic types of EVs – (i) all-electric vehicles (AEVs) and (ii) plug-in hybrid electric vehicles (PHEVs). AEVs include Battery Electric Vehicles (BEVs) and Fuel Cell Electric Vehicles (FCEVs). In addition to charging from the electrical grid, both types are charged in part by regenerative braking, which generates electricity from some of the energy normally lost when braking. 
• Climate change: From 1990s onwards, environmental impact of the petroleum-based transportation led to renewed interest in an electric transportation. EVs differ from fossil fuel-powered vehicles in that the electricity they consume can be generated from a wide range of sources, including fossil fuels, nuclear power, and renewable sources such as tidal power, solar power, hydropower, and wind power. The carbon footprint and other emissions of electric vehicles varies depending on the fuel and technology used for electricity generation. 
• How electricity is used: The electricity generated via any method can be stored on board the vehicle using a battery, flywheel, or supercapacitors. Vehicles making use of engines working on the principle of combustion can usually only derive their energy from a single or a few sources, usually non-renewable fossil fuels. A key advantage of hybrid or plug-in electric vehicles is regenerative braking, which recovers kinetic energy, typically lost during friction braking as heat, as electricity restored to the on-board battery.
• World EV market: China is adopting EVs on a large-scale rapidly. By 2019, the world's two best selling all-electric cars were the Nissan Leaf (300,000 in global sales) and the Tesla Model S (200,000 in global sales). These are relatively small numbers, though. 
• Indian scenario: The first decision to incentivise electric vehicles was taken in 2010, by the Ministry of New and Renewable Energy (MNRE), which announced a financial incentive for manufacturers for EVs. 

1. The scheme, effective from November 2010, 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. 
2. Then came Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, in 2015 which lasted till 2019. 
3. The FAME Phase II was announced in April 2019, to last three years.
4. Major concerns include Lithium resources needed for batteries, and local EV manufacturing capability.

• FAME INDIA SCHEME

1. What it is: The National Electric Mobility Mission Plan (NEMMP) 2020 provided the vision and roadmap for faster adoption of electric vehicles (EVs) and their manufacturing in India. The FAME scheme – Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) – was launched in year 2015. 
2. FAME Phase I and II: FAME phase I commenced 2015, and ended in 2017. It was extended till 2019. After that, FAME phase II was launched, with a Rs.10,000 cr budget, to run from April 2019 till March 2022. (Experts consider this a very low budge, indicating modest ambitions of government for EVs)
3. Aim: FAME aims at promoting manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth. 
4. Details of Phase I of FAME:
1. The Phase I of FAME was implemented via four focus areas - Demand Creation, Technology Platform, Pilot Project and Charging Infrastructure. 
2. Market creation through demand incentives was aimed at incentivizing all vehicle segments i.e. 2-Wheelers, 3-Wheelers Auto, Passenger 4-Wheeler vehicles, Light Commercial Vehicles and Buses.
3. Demand incentive was available to buyers of xEV in the form of an upfront reduced purchase price to enable wider adoption. 
4. Grants were sanctioned for specific projects under Pilot Projects, R&D/Technology Development and Public Charging Infrastructure components. 
5. Electric vehicle xEV is the generic name for electromotive vehicles such as a hybrid electric vehicles, plug-in hybrid electric vehicles and fuel-cell electric vehicles
5. Assessment of Phase I: Evaluation of Phase-I of FAME Scheme by an independent consultant showed – 
1. Agenda of clean mobility was placed front and center in all discussions
2. Overall outcomes of fuel saving and CO2 reduction are significantly below the target for FAME
3. Industry players are cautious about developing capabilities; core capabilities are not being given up
4. Subsidy structure needs to be revised based on the powertrain technology
5. Overall implementation is in slow pace
6. Benefits from unaccounted segments like e-3W and e-rickshaws can potentially add to the results
7. Growth in segments like e-rickshaws was unplanned

• Phase II arrives: Under FAME Scheme Phase-I, the demand incentive amount was determined for each category (vehicle - technology - battery type) taking into account the principles of Total Cost of Ownership (TCO), Pay-back Period on account of fuel savings, cost of maintenance etc. 

1. GoI is targeting a fully (100%) electric fleet for public transport, including buses, taxis and auto-rickshaws.
2. The demand incentive is linked to the battery capacity (kWh or kilowatt-hour) as cost of batteries is the differential factor (between EV and ICE)
3. Subsidy is capped at 20 per cent of the cost of the vehicles (40 per cent for buses)
4. Push to more localization
5. FAME-2 is outcome based and has set a target for the number of vehicles that will be subsidized
6. Targets are a million two-wheelers, half a million three-wheelers, 35,000 cars and 7,090 buses. 
7. Implementation is now made flexible, and policy may be reviewed every 3 months.

• Limitations of FAME II: 

1. Battery swap ignored – The policy has ignored a potential India-specific innovation – battery swap. In addition to building charging stations, users may simply have swapped batteries with each other.
2. Hybrids ignored – The govt. considers hybrids unviable and an intermediate technology, but for India which has 20 crore vehicles on the road today (expected to more than double by 2030), shifting all vehicles to electric will take time and hybrids could help in the transition.
3. Private vehicles ignored – Without incentivizing smartly, a genuine shift to EVs may take a long time.

• Performance: In the National Electric Mobility Mission Plan (NEMMP) unveiled in 2013 by then PM Dr Singh, the target was to achieve sales of 5-6 million electric and hybrid vehicles by 2020. That is not anywhere in sight. Even the FAME II is not too ambitious, and is going slowly and cautiously. China is adding 8 lakh EVs each year. 
• Lithium: As EVs grow in volumes in India, the access to most crucial resource – Lithium – needs to be ensured otherwise it will become the crude oil of the future! Given all these realities, the budget needed for EV policy needs to be much larger than the Rs.10,000 cr for FAME Phase II.

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