The Electric Mobility Promotion Scheme 2024 (EMPS 2024), initially slated to end on July 31, 2024, will now continue until September 30, 2024. The government has also increased the scheme's budget from Rs. 500 crore to Rs. 778 crore.

In a notable effort to boost India's shift to electric vehicles, the Ministry of Heavy Industries announced this two-month extension. EMPS 2024, which began on April 1, 2024, is designed to promote electric vehicle (EV) adoption across India, specifically targeting two-wheelers (e-2W) and three-wheelers (e-3W), including registered e-rickshaws and e-carts. The scheme supports the government's environmental initiatives and aims to develop the EV manufacturing sector.

Under its revised goals, EMPS 2024 plans to support 560,789 electric vehicles, comprising 500,080 e-2Ws and 60,709 e-3Ws. The scheme focuses on providing affordable and eco-friendly public transportation, emphasizing commercially registered vehicles, though privately or corporate-owned registered e-2Ws are also eligible for incentives.

This new scheme follows the successful Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) II program, which ended in March 2024 after subsidizing 1.365 million two-wheelers over four years. The sudden cessation of FAME II subsidies led to significant market disruption, with major players seeing a sharp drop in sales due to price hikes of about 25%.

The extension and enhancement of EMPS 2024 are seen as a much-needed boost for the EV industry, which has been awaiting government support since the end of FAME II. This move is expected to stabilize the market and promote continued EV adoption.

To foster advanced technologies, EMPS 2024 will offer incentives only for EVs with advanced batteries. The scheme also includes a Phased Manufacturing Programme (PMP) to encourage domestic manufacturing and strengthen the EV supply chain, aligning with Prime Minister Narendra Modi's vision of a self-reliant India (Aatmanirbhar Bharat).

While the extension of EMPS 2024 is a positive development, industry analysts point out ongoing challenges, such as the need for more flexible financing options from banks and the task of attracting traditional two-wheeler buyers beyond early adopters. Technological challenges, like the complexities of electrifying motorcycles – a popular choice among Indian consumers – also affect the pace of EV adoption.

As India's EV market evolves, new entrants like Ola Electric and Ather, along with established companies like Hero MotoCorp, Bajaj Auto, and TVS Motor, are increasing their efforts in the electric two-wheeler segment. With renewed government support through EMPS 2024, the industry hopes to overcome recent obstacles and achieve sustainable growth.

4o