{"id":14328,"date":"2021-03-11T00:00:00","date_gmt":"2021-03-11T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/11-03-2021\/finance-a-hurdle-for-electric-vehicles-niti-aayog\/"},"modified":"2021-03-11T00:00:00","modified_gmt":"2021-03-11T00:00:00","slug":"finance-a-hurdle-for-electric-vehicles-niti-aayog","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/11-03-2021\/finance-a-hurdle-for-electric-vehicles-niti-aayog","title":{"rendered":"Finance, a Hurdle for Electric Vehicles: NITI Aayog"},"content":{"rendered":"<p><strong>In News<\/strong><\/p>\n<p>NITI Aayog and Rocky Mountain Institute (RMI) India released a new report called <strong>\u2018Mobilising Electric Vehicle Financing in India\u2019<\/strong>.<\/p>\n<p><strong>Key Highlights of the Report<\/strong><\/p>\n<ul>\n<li><strong>Extent of Finance Needed:<\/strong> The transition will require a <strong>total capital investment of USD 266 billion (INR 19.7 lakh crore)<\/strong> in EVs, charging infrastructure, and batteries over the next decade.<\/li>\n<li><strong>Market Size:<\/strong> The electric vehicle financing industry will use a market size of USD 50 billion (<strong>INR 3.7 lakh crore<\/strong>) by 2030.\n<ul>\n<li>It amounts to about 80% of the current size of India\u2019s retail vehicle finance industry, worth USD 60 billion ( ?4.5 lakh crore) today.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Need to focus on Financial Barriers:<\/strong> Till now major focus was on overcoming adoption hurdles associated with technology cost, infrastructure availability, and consumer behaviour.\n<ul>\n<li>Financing is the next critical barrier that needs to be addressed to accelerate India\u2019s electric mobility transition.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Challenges for End Users:<\/strong> End-users are also facing several challenges, such as high interest rates, high insurance rates, and low loan-to-value ratios.<\/li>\n<li><strong>Toolkit of 10 solutions has been proposed:<\/strong>The 10 solutions recommended in the report include\n<ul>\n<li>Financial instruments such as priority-sector lending and interest-rate subvention.<\/li>\n<li>Creating better partnerships between OEMs and financial institutions by providing product guarantees and warranties.<\/li>\n<li>Developed and formal secondary market to improve the resale value of EVs and improve their bankability.<\/li>\n<li>Tackling the identified barriers in structured manner with innovative financing models.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Other Recommendations:<\/strong> Recommendations beyond finance include\n<ul>\n<li>Digital lending.<\/li>\n<li>Business model innovation.<\/li>\n<li>Fleet and aggregator electrification targets.<\/li>\n<li>Creation of an open data repository for EVs.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Efforts of Indian GOvernment to promote E-Vehicles<\/strong><\/p>\n<p>The Department of Heavy Industry formulated the <strong>FAME India Scheme (Faster Adoption and Manufacturing of (Hybrid &#038;) Electric Vehicles in India)<\/strong> in <strong>2015<\/strong>.<\/p>\n<ul>\n<li><strong>Phase 1 of the Scheme<\/strong> was extended to March 2019.\n<ul>\n<li>About 280,000 hybrid and electric vehicles were supported by way of a demand incentive amounting to about INR 359 crores (about US $50.5 million).<\/li>\n<li>This resulted in saving around 50 million litres of fuel and the reduction of around 124 million kilograms of CO2.<\/li>\n<li>Development of about 500 charging stations across the country was undertaken.<\/li>\n<li>Also, Energy Efficiency Services Limited (EESL) under the Ministry of Power has deployed 65 public charging stations for electric vehicles in the country.\n<ul>\n<li>EESL is also deploying around 300 AC and 170 DC captive chargers across government offices in the country.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Phase 2:<\/strong> planned to support about 100,000 electric-2 wheelers, 500,000 electric-3 wheelers, 55,000 e-4 wheeler passenger cars, and 7,000 e-buses through demand incentives for a period of three years.\n<ul>\n<li>This phase started in April 2019.<\/li>\n<li>A budget provision of INR 1000 crore (about US$ 140 million) has been created for the setting up of a charging infrastructure under the scheme.<\/li>\n<li>The Department of Heavy Industry had issued an Expression of Interest (EoI) inviting proposals for the establishment of 1,000 charging stations under this phase.<\/li>\n<\/ul>\n<\/li>\n<li>The following initiatives have been launched by the government for electric vehicle industry promotion in India:\n<ul>\n<li>Under the new GST regime, GST on EVS is reduced from the existing 12% rate to 5% as against the 28% GST rate with cess up to 22% for conventional vehicles.<\/li>\n<li>The Ministry of Power has allowed the <strong>sale of electricity as a \u2018service\u2019 for the charging of electric vehicles<\/strong>.\n<ul>\n<li>This will attract investments into the charging infrastructure.<\/li>\n<\/ul>\n<\/li>\n<li>The government has granted an <strong>exemption to battery-operated transport vehicles and transport vehicles that run on ethanol and methanol fuels from the requirements of the permit<\/strong>.<\/li>\n<li>The government has proposed the <strong>exemption of registration fees<\/strong> for battery-operated\/electric vehicles to promote the use of eco-friendly vehicles in the country.<\/li>\n<li>The Ministry of Road Transport and Highways has allowed the age group of <strong>16-18 years to obtain driving licences to drive e-scooters<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.livemint.com\/auto-news\/ev-financing-industry-to-be-worth-rs-3-7-lakh-crore-by-2030-niti-ayog-report-11615351697729.html\" target=\"_blank\" rel=\"noopener\"><strong>LiveMint<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News NITI Aayog and Rocky Mountain Institute (RMI) India released a new report called \u2018Mobilising Electric Vehicle Financing in India\u2019. Key Highlights of the Report Extent of Finance Needed: The transition will require a total capital investment of USD 266 billion (INR 19.7 lakh crore) in EVs, charging infrastructure, and batteries over the next [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14329,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[26],"class_list":["post-14328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-gs-3"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/3729504current-affairs (1).jpg","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=14328"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14328\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/14329"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=14328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=14328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=14328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}