Promotion of electric vehicles may hit component makers: Panel

Stating that promotion of hybrid and electric vehicles in India will have positive impact in a variety of areas but it could also adversely impact automotive component industry, a Parliamentary panel has said, adding the government must undertake an impact assessment study.

The Parliamentary Standing Committee on Industry in its report, while deliberating on the merits of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME-India) pointed out that "the automotive component industry, catering to conventional fuel vehicles can be adversely impacted by the advent of electric vehicles".

"Accordingly, the Committee wants the Department of Heavy Industries (DHI) to address the effect of introduction of hybrid/electrical vehicles on the auto component industry through an impact assessment study," the panel said.

It also observed that development of hybrid/electrical vehicles entail high technology inputs. Cost intensive battery technology and charging infrastructure are going to be extremely decisive factors in the successful attainment of the objectives of the scheme.

"The committee hopes DHI will be able to secure enough funds to facilitate development of the requisite high-end technology required for the scheme," it said.

The panel was of the opinion that FAME India is an ambitious scheme that aims to cater to the future scenario in the automotive industry, when fossil fuels become less available and alternative propulsion systems become inevitable.

"Considering the possible positive impact the scheme can bring about in a variety of areas, DHI should make all out efforts for its fruitful and timely implementation, by taking along all stakeholders," it said.

To promote eco-friendly vehicles, the government recently launched the FAME-India scheme offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.

The scheme is a part of the National Electric Mobility Mission Plan. It envisages Rs 795 crore support in the first two fiscals starting with the current year.

Expressing concerns over delays in the full implementation of NATRiP, the panel said the project was originally proposed to be completed in 6 years from 2005, after the expiry of two extensions spanning three years from 2012 to 2014, still needs three more years, upto 2017, for completion.

"...Even a flagship project like NATRiP, which has delivered a lot of unprecedented results, could not escape time and cost overruns, which are typical banes of the Indian administrative system," it said.

The Committee recommended that every effort should be made to successfully wind up the project by the current period of extension being sought.