EV Industry Faces New Localisation Challenges As Govt Pushes For Domestic Manufacturing

ENA Sectors 2024-07-26 16:28:20 New Delhi, Jul 26 (KNN) In a move to bolster India's electric vehicle (EV) manufacturing capabilities, the Ministry of Heavy Industries is proposing significant changes to the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-III) subsidy scheme. The new regulations, currently under discussion with stakeholders, aim to increase domestic production of EV components and reduce reliance on imports. The proposed FAME-III scheme includes several key changes. The number of components under the Phased Manufacturing Programme (PMP) will be reduced fr0m 18 to 12. Stricter localisation requirements will be implemented for subsidy eligibility. Components removed fr0m the PMP list will now require mandatory domestic manufacturing. There will be restrictions on battery pack and module imports, while limited imports will be allowed for specific high-tech components. The ministry has outlined clear guidelines for localisation across various EV components. For electric two-wheelers, three-wheelers, and e-rickshaws, only battery cells and associated thermal and battery management systems can be imported. Complete battery packs or modules in knocked-down form will not be permitted. Similarly, for onboard chargers, vehicle control units, and DC-DC converters, imports will be limited to semiconductor devices and electronic components. The traction motor, a crucial EV component, will see restrictions with only permanent magnets, Hall Effect sensor kits, and encoders eligible for import. The government's push for localisation extends to printed circuit board (PCB) manufacturing, a move that has raised concerns among EV makers. Industry executives argue that the domestic PCB manufacturing base is limited, potentially creating bottlenecks in the supply chain. A senior auto industry executive, speaking on condition of anonymity, said, The recent Union Budget reduced duty on PCBs, indicating insufficient domestic manufacturing capacity. If mobile device manufacturers are allowed to import PCBs, why should EV makers be forced to procure them domestically? The ministry has also clarified that local suppliers importing finished parts (traders) and direct imports fr0m foreign sources will not qualify for PMP and FAME-III benefits. To be eligible, manufacturers must engage in activities such as local sourcing of raw materials and child parts, local assembly of finished products, or a combination of partial imports and local sourcing followed by domestic assembly. For four-wheelers and e-buses, the PMP will include four components: electric compressors for HVAC and brakes, AC charging inlets, and DC charging inlets. (KNN Bureau) 38755 https://knnindia.co.in/news/newsdetails/sectors/ev-industry-faces-new-localisation-challenges-as-govt-pushes-for-domestic-manufacturing 2024-07-26 16:28:20 knnindia.co.in EV Industry Faces New Localisation Challenges As Govt Pushes For Domestic Manufacturing