SMEV (Society of Manufacturers of Electric Vehicles) has petitioned the National Green Tribunal (NGT), expressing concerns that the latest decision of the Ministry of Heavy Industries (MHI) to cut down FAME II subsidies is likely to disrupt India’s growth in the EV sector and consequently have a detrimental impact on the environmental and health indices of the country.
MHI, assigned with the mandate to implement the FAME II programme in the country and, specifically, to induce a mass transport shift towards E-mobility, has decided to cut subsidies by 75%.
In a recent letter, SMEV sought NGT’s support for a Green Tax on fuel-based two-wheelers to incentivise the adoption of green vehicles and contribute to the national objective of environmental preservation and pollution reduction.
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OEMs Under Financial Stress
Many OEMs, as pointed out by SMEV, are unable to cope with the financial stress caused by actions of the MHI as subsidies amounting to over INR 1,200 crore have been held up, and further demands of retrospective payback of subsidies given in 2019 have been made.
It is a matter of time until they shut shop due to lack of working capital, loss of investor and bank support, delay in production timelines and a rapidly vanishing distribution network, SMEV said in the letter.
This Green Tac measure aligns with the three key objectives of the Government, namely: reducing fossil fuel usage, phasing out polluting vehicles, and significantly improving the health indices of our national population. The association emphasised that transitioning from Internal Combustion Engine (ICE) vehicles to Electric Vehicles (EVs) is the vision set forth by the Prime Minister.
Ajay Sharma, Secretary General, SMEV, said, “At a time when the world has barely recovered from the onslaught of the lung-affecting COVID malaise, to allow such a policy U-turn is to play with the health of the country. Electric vehicles are subsidised across the world with the intent to induce a mass shift towards non-polluting energy systems. The Ministry’s decision is contrary to this consciousness and an anomaly that defies logic or law especially, as the EV manufacturers were emboldened to shift technologies, work force, capital and enterprise towards this sector based on the support expressed by the Government.”
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