HomeEV BUZZINDIAN EV MARKETGovt. Considering a Renewed FAME 3.0 Subsidy Plan To Support EV Industry

Govt. Considering a Renewed FAME 3.0 Subsidy Plan To Support EV Industry

FAME 3.0, an upgraded subsidy program for “faster adoption and manufacturing of electric vehicles,” is probably in the works and might fund research to provide in-house solutions for the market and light commercial vehicles. 

However, the government is just stating that it is reviewing the suggestions from industry organisations. “We have received proposals from agencies such as Siam and Ficci. We are in the process of analysing them. The question is whether another round of FAME is needed when PLI (production-linked incentives) has already been announced,” Kamran Rizvi, the secretary for heavy industries, told TOI. He declined to make a statement on any potential FAME 3. 0 specific areas. 

The senior civil servant stated that a new purchase for 20 gigawatts of advanced chemistry cells is expected to be launched next month after meetings with industry stakeholders scheduled for next week. This is despite the ministry’s efforts to find a balance between the two incentive programs. Reliance and Ola were among the bidders who won in the first round. The ministry’s data revealed that although some cities, especially numerous in the South, have seen their proportion grow to over a quarter of new registrations, electric two-wheelers still only make up less than 5% of sales nationwide.

The manufacturers of electric vehicles, particularly those involved in the two-wheeler market, have been asking for a new round of incentives, claiming that a complete withdrawal would harm sales. Around the world, governments are enticing consumers to switch to greener fuel, with electric vehicles receiving most of the attention.

To ensure that a larger group of buyers can still get the benefit, despite its lower value, the heavy industries ministry has decreased the subsidy outlay per bike as the budget for electric two-wheelers is virtually depleted, according to Rizvi, who added that it was done in cooperation with the industry.

According to him, the number of two-wheelers covered under FAME will be close to 10 lakhs by February based on the existing level of subsidy. Some members of the sector claim that the incentive, which previously ranged from over Rs 50,000 per electric scooter to just over Rs 21,000, is now more reasonable. “One of the players who met me said that we have moved from providing steroids to giving tonic now,” Rizvi said.

What is the FAME scheme?  

The government launched the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, which offers incentives for buying electric vehicles to accelerate the transition to green mobility. 

Beginning on April 1, 2015, phase one of this program was initiated for two years. After that, the plan was permitted till March 31, 2019. The FAME 1.0 received a total budget of Rs 529 crore, which was completely utilised.

With Rs 10,000 crore over three years, the government launched phase two of the FAME Scheme. The plan went into effect on April 1, 2019. To increase the demand for electric vehicles nationwide, 86% was set aside for demand incentives.

The government is thinking about introducing a subsidy program to support the electric vehicle (EV) industry. This suggested program aims to encourage consumer adoption of EVs, encouraging sustainable transportation and lowering carbon emissions. The goal of the subsidy program is to hasten the country’s EV adoption and growth.



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