SMEV warns non-payment of subsidies is killing the Indian EV revolution
- ByStartupStory | April 19, 2023
The Indian electric vehicle (EV) industry is facing a major liquidity crisis due to the non-payment of subsidies worth ₹1,200 crore ($161 million), according to a petition filed by the Society of Manufacturers of Electric Vehicles (SMEV). The association, which represents Indian EV manufacturers, has sent a plea to the Parliamentary Standing Committee on Electric & Hybrid Mobility, Energy, and Estimates to raise the issue.
SMEV claims that the withholding of subsidies is causing a serious financial stress for the industry, despite the supply chain being ready. The situation is impacting the momentum of the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme, which has been a driving force for EV adoption in India.
“Current trends are showing a slowing down of EV adoption due to the financial stress for the industry, which has been besieged by irritants designed to disturb the momentum of FAME 2,” SMEV said in a statement.
The association has gone as far as to say that the non-payment of subsidies is killing the EV revolution in the country. The subsidy scheme was launched in 2019 to encourage the adoption of EVs and the setting up of EV charging infrastructure in the country. However, SMEV claims that the non-payment of subsidies is causing delays in the release of new models and is affecting the production capacity of existing models.
The Indian EV industry has seen a surge in demand over the past few years, with traditional automakers also jumping on the EV bandwagon. The FAME-II scheme has been a major catalyst for the growth of the industry, with the government providing subsidies for EVs and charging infrastructure. However, the non-payment of subsidies has put a brake on the industry’s growth, according to SMEV.
“The EV industry has all the potential to make India a global hub for EV manufacturing, but to realize this dream, we need a supportive policy environment from the government,” said Sohinder Gill, Director General of SMEV.
The non-payment of subsidies is a major setback for the Indian EV industry, which was hoping to play a major role in the global shift towards sustainable transportation. With the government yet to release the funds, the industry is facing an uncertain future.
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