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- 05 Sep 2024
- ICICI Securities
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DOMESTIC ELECTRIC VEHICLE INDUSTRY'S INTERESTING DEVELOPMENTS
News: According to media Sources, the government announced that FAME-III scheme will be rolled out in the next two months, replacing the current Electric Mobility Promotion Scheme (EMPS) 2024, which is set to expire at the end of September. Separately, according to media sources, Reliance Industries Ltd. (RIL) has been awarded a 10 GWh Advanced Chemistry Cell (ACC) battery storage capacity under the PLI scheme, with an incentive outlay of ~₹3,620 crore. There are 5 other players who are in the waitlist currently which includes Amara Raja as well. Also, as per media sources, Delhi government has stopped offering road tax waiver on purchase of electric vehicles, which has led to sharp decline in sales of electric vehicles in the state, with effect from 31st August 2024.
Views: Domestic EV industry is at a nascent stage with domestic penetration levels pegged at ~5-6%. It needs government support to scale up amid initial inertia amongst customers while buying electric vehicles (range anxiety) as well as higher initial acquisition price. We expect both centre and state governments to support the industry through their respective incentive schemes. Delhi is an important state for domestic EV industry accounting for ~10% of EV sales domestically. Given the pollution issues in the state, we expect the benefits to be restored soon. Amara Raja not winning incentives in the ACC-PLI scheme is sentimentally negative for the stock.
Impact: Neutral