False claims: Taking note of the growing wrongful subsidy claims, the FAME-II scheme — which was introduced to promote demand for EVs by establishing EV charging infrastructure and offering upfront subsidies — will be modified.

Govt to amend FAME-II to fix policy loopholes

According to a report in the Economic Times, the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME)-II scheme is about to change. The government is also aiming to place more emphasis on domestic value addition (DVA). The FAME-II scheme is being modified in order to eliminate loopholes in the ways that EV original equipment manufacturers availed the benefit of the incentives provided by the scheme, while importing all of their components from China and only assembling them in India.

In a statement and presentation to vehicle manufacturers, the Ministry of Heavy Industry said digital methods are being used to determine DVA. “DVA data is required to be calculated and stored into the Enterprise Resource Planning (ERP) system of Original Equipment Manufacturers (OEMs) at granularity level,” the presentation said. This occured just two weeks after the ministry introduced an automated online data transfer to capture crucial information about DVA from the ERP system of PLI applicants to PLI Auto Portal.  FAME-II scheme, also known as phase-II of FAME, was introduced in 2019 with an investment of INR 10,000 Cr, with an objective to promote demand for EVs by establishing EV charging infrastructure and offering upfront subsidies.

Govt releases new Battery Waste Management Rules, sets recycling targets for spent EV batteries

The Ministry of Environment, Forests and Climate Change last week notified the Battery Waste Management Rules, 2022 under the ambit of India’s Mission for Circular Economy. The new rules, for the first time, specifically covers EV batteries. The rules introduce Extended Producer Responsibility for EV battery producers along with explicit functions and targets for various stakeholders, and are expected to bring clarity to an otherwise poorly-defined space. The rules now specify an ambitious recovery target of 90 per cent by 2027 for EV batteries. They also mandate a minimum use of 5 per cent of recycled material in new batteries manufactured from 2027, which will be ramped up year on year to 20 per cent by 2030-31.

Additional safety norms for EV batteries to come into effect from 1 Oct

Addressing the EV fire incidents in different parts of the country, the Union Ministry of Road Transport and Highway said additional safety requirements for battery safety would come into effect from October 1, 2022. An expert committee was constituted by the ministry to recommend additional safety requirements in the existing battery safety standards notified under CMV Rules. Based on the recommendations of the expert committee report, the ministry, on August 29, 2022, issued an amendment to requirements for motor vehicles with less than four wheels running on electric powertrain, and amendments to specific requirements for four-wheeler EVs carrying passengers and goods. These amendments include additional safety requirements related to battery cells, battery management system, on-board charger, design of battery pack, thermal propagation due to internal cell short circuit leading to fire etc.

Hero Electric and Okinawa subsidies put on hold for claiming wrongful incentives 

The government put the subsidies of Hero Electric and Okinawa on hold for allegedly claiming incentives for products not made in India, CNBC-TV18 reported. After receiving complaints that EV players were improperly claiming subsidies without manufacturing the components or products in India, the government introduced an application programming interface to ensure compliance with domestic value addition criteria in the FAME and the public-linked incentives (PLI) schemes.  Approximately Rs60-70 crore will be adjusted against future payments to Hero Electric and Okinawa. Thanks to the new application programming interface, wrongdoings are already being stopped in their tracks, a govt source told CNBC-TV18. It is also making it easier for the government to obtain the company’s digital footprint in the event of a complaint.

Mandatory standards for EV batteries to come into effect in 2-3 months

The Indian government will soon notify the new mandatory standards for battery components and their testing, including cells, of two- and four-wheeler EVs, which will come into force in two-three months.. The government will also make it mandatory for vehicle manufacturers to sell EVs with only standard-compliant batteries. The provision on penalty against companies failing to comply with the standards and regulatory norms will kick in only after these standards are notified.

According to officials, the government will announce the standards for “conformity of production (CoP)” of batteries. This means that as EV models are produced in large quantities, random samples of finished batteries will be taken from factories and tested to determine whether the companies are adhering to the standards. There is currently no CoP provision for EVs.

California to ban sales of petrol-only vehicles by 2035

The state of California will prohibit the sale of new petrol-only automobiles by 2035 as an additional measure to reduce emissions. BBC news reported that under the rules issued by the California Air Resources Board (CARB), 35% of new vehicles sold in the state must be electric, hybrid or hydrogen-powered by 2026. The regulations would apply to 68% of vehicle sales by 2030, and 100% by 2035. The new regulations are designed to compel automakers to speed up the release of cleaner automobiles on the market. Late last week, state regulators gave their approval to the scheme. California is the biggest US state by population,  with more than 39m residents.  However, the Alliance for Automotive Innovation—which represents carmakers including General Motors, Volkswagen and Toyota—said more needed to be done to boost demand for electric vehicles (EVs).

Volkswagen seals the deal to source tariff-friendly batteries from Canada

German companies Volkswagen and Mercedes-Benz sealed agreements with Canada to secure access to raw materials, such as nickel, cobalt and lithium for battery production. German Chancellor Olaf Scholz said Germany and Canada plan to work together in “areas such as critical raw materials.” A VW representative stated that the automaker is focusing on accelerating its battery activities, “particularly reliable and sustainable supply chains,” together with PowerCo, its specialised subsidiary for its battery business. The memorandums of understanding are to be signed during Scholz’s current Canada trip. The German leader wants to enlist Canada to help the country reduce its reliance on Russia for energy and raw materials.  

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