MHI to Provide up to 80 Percent Subsidy on Upstream Infrastructure for EV Public Charging Stations
The Ministry of Heavy Industries (MHI) has proposed up to 80 percent subsidy on upstream infrastructure for public EV fast charging stations under the PM E-DRIVE Scheme, with a potential 100 percent funding in exceptional cases, targeting robust EV adoption across India.
January 07, 2025. By Mrinmoy Dey
However, in exceptional cases, the Ministry may consider higher funding for the establishment of charging infrastructure to the extent of 100 percent of cost (including upstream power infrastructure) of the project, noted a recently released draft guidelines for setting up electric vehicles (EV) charging infrastructure under the PM E-DRIVE Scheme.
“Currently, the EV charging business may not be viable for CPOs due to low utilization levels and high electricity tariffs. With subsidies on upstream infrastructure, MHI aims to improve the viability for CPOs and also lower the tariff for EV users,” noted the draft.
It further added that many states are providing capex subsidies for EV charging equipment under their state EV policies. “States may also consider allowing additional incentives to further improve the viability of the charging business and reduce EV charging tariffs for users, increasing EV adoption,” the draft noted.
To cater to the need for fast chargers, the PM E-DRIVE scheme has an outlay of INR 2,000 crore for setting up public fast charging stations.
The scheme targets the installation of ample public charging infrastructure. For electric two-wheelers (e-2Ws) and three-wheelers (e-3Ws), 48,400 LECCS/LEVDC type chargers with a minimum charger capacity of 12 kW will be supported under PM E-DRIVE scheme with an outlay of INR 581 Crore.
For electric four-wheelers (e-4Ws) including cars and LGVs, the scheme will support the installation of 22,100 CCS-II type charges with a minimum capacity of 60 kW. Funds allotted for this is about INR 1,061 crore.
For e-buses and e-trucks, the scheme targets 1,800 CCS-II chargers with a minimum capacity of 240 kW with an outlay of INR 346 crore.
The government seeks active collaboration and engagement from diverse stakeholders, including charge point operators, EV charger manufacturers, state governments, urban local bodies (ULBs), government agencies, central ministries, power distribution companies (Discoms), highway authorities, and various central public sector enterprises (CPSEs).
According to the draft, in addition to charger capex and the corresponding need for upstream infrastructure, one major component is land availability. Access to land and high land rentals present major hurdles in deploying charging infrastructure.
“State governments and Central Ministries are also encouraged to carry out feasibility studies to identify suitable locations for EV PCS. These site assessments will help identify potential locations based on traffic patterns, proximity to major commercial spaces, land accessibility, sufficient power supply, and potential for grid upgrades to support the additional load,” the MHI said in the draft guidelines.
The draft envisages state governments and central ministries to adopt a transparent, competitive bidding process, with CPOs onboarded for the deployment of EV charging stations. “CPOs bring technical expertise in operating charging stations and offer mobile applications and other features that enhance the usability of EV charging stations, making chargers more accessible to EV users,” it said.
A technical committee, chaired by an Additional/Joint Secretary of the Ministry of Heavy Industries (MHI) and including members from NITI Aayog, the Ministry of Power, and the Automotive Research Association of India (ARAI), will evaluate and shortlist proposals. The committee's recommendations will be submitted to the Project Implementation and Sanctioning Committee (PISC). Following PISC's approval, the proposals will be processed within MHI for final approval by the competent authority in consultation with the Internal Finance Wing.
“After approval by the competent authority, the participating State government/ Central Ministry will be informed about the total number of sanctioned charging stations, with a request to initiate the tendering process,” noted the draft.
The applicable incentive payable to state governments and central government ministries will be calculated based on the price per kW of the benchmark upstream cost established by BEE.
Once the incentive is finalised and communicated, MHI will release it in three instalments: 30 percent after the issuance of tender as mobilisation advance, 40 percent after deployment of EVSEs as per bid documents and the balance 30 percent after successful commercial operation of charging stations.
“This amount will be exclusively used for reimbursement of the upstream infrastructure cost based on the type of charging station. The applicable incentive amount will be released to the tender inviting authority. However, the upstream infrastructure (assets up to the meter) will always belong to the relevant Discom in all circumstances,” clarified the draft.
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