The Department of Heavy Industries has extended the deadline for localisation of several components under its phased manufacturing programme (PMP) for electric vehicles (EV) from 1 October 2020 to 1 April 2021. The move is expected to support the fledgling EV industry as the localisation plans of several companies were derailed due to disruption from COVID-19 pandemic.
In order to get demand incentives under the Rs 10,000 crore, Phase-II of the Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) scheme, companies must gradually increase local sourcing of components for their EVs as stipulated in PMP. Amongst the components for which the Centre has extended the deadline for mandated local procurement are traction motors, motor controllers, vehicle control units, on-board chargers, convertors and instrument panels.
Companies that were looking to invest in local production of EV components pushed back their plans due to the pandemic. The process of vehicle certification also slowed. PMP was introduced by the government with the intention of allowing imports of key components until there was sufficient local demand for EVs and then gradually increasing the localisation requirements for availing demand incentives.
Phase-II of the FAME scheme has a financial outlay of Rs 10,000 crore for a period of three years starting April 2019. The scheme gives direct subsidies to buyers of electric vehicles.