Electric Mobility Promotion Scheme (EMPS) 2024: Eligibility, Timeline, DVA, Benefits & Highlights

With a growing population in India, the government has emphasised the promotion of Electric Vehicles (EVs) and building a sustainable transportation sector. To achieve this, the government launched the Electric Mobility Promotion Scheme (EMPS)-2024 to promote electric mobility in India and boost the EV manufacturing eco-system. This article provides detailed insights about the Electric Mobility Promotion Scheme, its aim, purpose, and more. 

What is the Electric Mobility Promotion Scheme (EMPS) 2024?

The Ministry of Heavy Industries (MHI) in India launched the Electric Mobility Promotion Scheme (EMPS) in March 2024. It aims to boost the adoption of two-wheeler and three-wheeler electric vehicles for commercial purposes and provide the necessary support for developing and manufacturing EVs in India. 

The EMPS-2024 will be implemented for four months, from 1 April 2024 to 31 July 2024. It has a budget of Rs. 500 crore and provides subsidies to EVs. Subsidies of up to Rs. 10,000 will be provided for each two-wheeler EV, up to Rs. 25,000 for each small three-wheeler EV, and up to Rs. 50,000 for each large three-wheeler EV. 

The MHI will reimburse the subsidies or demand incentives to the EV manufacturers upon the sale of a vehicle, which will also benefit the consumers as the subsidy amount will be deducted from the final invoice price, thus reducing the purchase price of the EVs.

Support for EVs Under Electric Mobility Promotion Scheme (EMPS) 2024

Under this scheme, EVs must be manufactured and registered by 31 July 2024 to receive subsidies. The support under the EMPS-2024 is provided in the following manner:

• The manufacturer must apply to the Ministry of Heavy Industries for demand incentives under the scheme. 
• After the application, the designated testing agencies will certify the vehicle model and forward it to the MHI, which will approve the incentive amount. 
• After the MHI approves the incentive, the manufacturer must submit the required documents to the MHI to receive the incentive amount.
• After submitting the documents, the manufacturer can dispatch the vehicle to the dealer or distributors with the proper billing or invoice. The manufacturer must deduct the incentive amount from the vehicle invoice. Thus, the purchase price of the EV will be less for the consumer.
• The manufacturer must submit the reimbursement claim to the MHI along with the invoice and other required documents within 120 days of the sale of the vehicle.

Highlights of the Electric Mobility Promotion Scheme (EMPS) 2024

The main highlights of the Electric Mobility Promotion Scheme (EMPS) 2024 are as follows:

Importance of Promoting Electric Mobility

It is crucial to make the public understand the importance of electric mobility and its benefits. Promoting electric mobility is essential for lowering harmful emissions, mitigating the effects of climate change, and reducing air pollution in the environment. Moreover, these EVs are more cost-effective and energy-efficient. 

Thus, in the long run, it enables individuals to save more on fuel and vehicle maintenance. By spreading this information through various channels, it is possible to assist people with informed decisions while purchasing the next vehicle. 

From an economic standpoint, the EMPS 2024 scheme will support India’s Atmanirbhar Bharat initiative, which promotes domestic manufacturing and the young EV sector. This will also provide employment opportunities across the country. 

Purpose of the Electric Mobility Promotion Scheme

The main purpose of the Electric Mobility Promotion Scheme is to support 3,72,215 EVs. This scheme aims to establish a competitive and effective electric vehicle manufacturing sector in India. For this purpose, the government has adopted the Phased Manufacturing Programme (PMP) under this scheme to encourage domestic manufacturing and strengthen the EV supply chain. 

The main objective behind this scheme is to transition to green mobility and thereby support the country’s EV industry. This will also help encourage the adoption and development of advanced battery technologies in EVs.

Eligibility for the Electric Mobility Promotion Scheme

The Government of India will provide EV subsidies to the following vehicles:

• Two-wheeler and three-wheeler EVs must be registered under the Central Motor Vehicles Rules, 1989.
• Two-wheeler EVs, including vehicles used for commercial, private or corporate purposes.
• Three-wheeler EVs, including e-carts, e-rickshaws and L5 category EVs registered as commercial vehicles.
• EVs must have an advanced battery system.

Timeline for Manufacturing

The EMPS-2024 begins on 1 April 2024 and continues until 31 July 2024. Thus, to receive subsidies, all EVs must be manufactured and registered within 31 July 2024.

Domestic Value Addition (DVA)

Domestic Value Addition (DVA) represents the percentage share of value for goods and services meant for export. To promote local manufacturing, companies must set up operational facilities within three years with a minimum DVA of 25% in the same year. However, this DVA percentage can be extended to 50% in the next five years from the date the Ministry of Heavy Industries issues the approval letter. Once a DVA of 50% is achieved, the bank guarantee is returned. 

Benefits of Electric Mobility Promotion Scheme (EMPS) 2024

• Promotes the adoption of electric vehicles in India. 
• Encourages improvement in battery technologies in vehicles.
• Boost EV sales and propel the long-term growth of electric mobility.
• Helps to maintain the momentum in EV sales in recent months.
• Promotes a competitive, efficient and resilient EV manufacturing industry in India.
• Creates significant employment opportunities.  

EMPS 2024 vs FAME II

There is a difference in subsidy levels between EMPS 2024 and its predecessor, FAME II. EMPS 2024 offers a subsidy of up to Rs. 10,000, whereas FAME II provides a subsidy of Rs. 22,500. This subsidy is, however, applicable to two-wheeler electric vehicles. 

Initially, the purchase cost for two-wheeler electric vehicles is higher under EMPS because of low subsidies. However, electric scooters see an initial price increase of around 10%. For a short duration, electric two-wheeler prices might seem less price competitive than petrol scooters. 

This kind of subsidy appears challenging for manufacturers. The imposition of low subsidies creates additional pressure on cost structure. Manufacturers need to decide whether to accept the given cost or surpass it to consumers through an increase in prices. Finding the right balance between the two is crucial to maintaining affordability. 

The EMPS is a vital pillar in building a well-established EV transportation system in India. Because of continued technological advancement and the development of infrastructure, it has become possible to accept the adoption of electric two-wheeler and three-wheeler vehicles. 

Despite the ongoing challenges, the government's commitment to building a sustainable transport system has been remarkable. Moreover, with the evolution of FAME, the Indian transportation sector has revolutionised, contributing to a greener future ahead.