CSE welcomes stopping of incentives for mild diesel hybrids

Government disqualifies mild hybrid cars from getting incentive under the FAME programme aimed to promote electric mobility in the country

Centre for Science and Environment (CSE) welcomes the move. CSE had earlier raised an alarm on this practice of pushing mild diesel hybrid cars

• CSE analysis of FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicle) had found the programme defeating the purpose of promoting electro-mobility.

• Big step forward as almost 63 per cent of the FAME incentives so far have gone to mild diesel hybrid cars that already enjoy substantial excise cuts. This undercuts the fuel efficiency and emissions-saving benefits of the electro-mobility programme.

• Electric and strong hybrids have remained neglected. 95 per cent of all four-wheeled vehicles sold under this programme have been mild diesel hybrid versions; a mere 3 per cent have been strong hybrids and 2 per cent, electric cars.

• This course correction will now help the programme to work for strong hybrids and battery-operated electric vehicles.  

New Delhi, April 1, 2017: Centre for Science and Environment (CSE) welcomes the move by the Ministry of Heavy Industries and Public Enterprises to remove mild diesel hybrids from getting incentives under the FAME programme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicle) meant to promote electro-mobility in the country. In its notification dated March 30, 2017 (see the notification here: (https://cdn.cseindia.org/attachments/0.15721600_1522406332_Mildhybridnotice.docx), the Ministry has stated categorically, “mild hybrid technology as mentioned under clause 10 of FAME India scheme will stand excluded from the benefits under the FAME India scheme w.e.f 1st April , 2017.” The Government of India has thus responded to public health and climate change concerns. 

This is a big step forward as during the first phase, the FAME scheme has only ended up hard-selling mostly mild diesel hybrid cars. In 2015-16, of the amount of Rs 70 crore spent on incentives -- Rs 40 crore, or 57 per cent -- was spent on diesel mild hybrids.

Said Anumita Roychowdhury, executive director-research and advocacy, CSE: “By removing the mild diesel hybrids from the FAME scheme the entire incentive amount has now been unlocked for the benefit of the electro mobility programme. These mild diesel hybrids are a marginal improvement over conventional diesel models, but significantly more polluting and fuel inefficient compared to electric and strong hybrid cars. These have blocked scaling up of strong hybrid and electric vehicles for the big transition towards clean and zero emissions.”

This amendment was urgently needed to move towards the target set by the National Electric Mobility Mission to have six-seven million electric vehicles by 2020. Even though this segment of electric and hybrid vehicles is still a low volume one – with only 1.3 per cent market penetration -- it is an important step needed in the longer run to clean up the air, reduce climate impacts and secure energy. Globally, even though penetration is still about 3 per cent, strategies are being defined for much quicker transition.

The incentive for mild hybrids that are only 7-15 per cent more fuel-efficient than comparable conventional diesel models, was only fanning dieselisation at serious public health cost. This also did not allow the much bigger improvement in fuel efficiency that would have been possible – as much as 32 per cent, from the transition towards plug-in-hybrid cars and 68 per cent for fully electric models.

Mild diesel hybrids are a standard and entrenched approach of improving fuel efficiency that does not require any fiscal and regulatory support. But as much as 60 per cent of the FAME incentives have gone to support minimal improvements. Instead of tying this up as incentive to promote mild diesel hybrids, the same amount could have been spent on infrastructure for electric vehicles and strong hybrids to improve the effectiveness of the overall programme.

It may be noted that the notification from the Ministry of Heavy Industry defines mild hybrids as ‘those that have minimal application of electric energy and use regenerative braking power only to assist the motor to start from the stationary position’. These vehicles cannot run on electric power. A strong hybrid vehicle has a provision for off-vehicle charging and a rechargeable energy storage system. A strong hybrid with an electric drive train allows more significant fuel and emissions saving.

Fully battery-operated electric vehicles on the other hand are powered exclusively by an electric motor whose traction energy is supplied exclusively by a battery in the vehicle which has a ‘electric regenerative braking system’. These have zero tailpipe emissions. Pollution-challenged cities in a climate-constrained world can benefit from quicker transition to electro-mobility.

Currently, mild diesel cars are also enjoying significant tax reduction and are proposed to get more regulatory incentive under the fuel economy regulations to be implemented this year. Clearly, incentives are needed for strong hybrid and electric vehicles that are part of the solution to the challenges of local toxic pollution, energy security and climate change.

Said Roychowdhury: “While welcoming this move, we urge that the FAME programme should be further expanded to adopt a win-win strategy of linking electro-mobility with public transport strategy in cities. At the same time Bureau of Energy Efficiency should not provide extra incentives for these cars under the fuel economy standards for cars to be implemented this year.”

For more on this, contact Souparno Banerjee, souparno@cseindia.org, 9910864339.