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Home >Auto News >India extends FAME scheme by two years to incentivise purchase of electric vehicles

The Union government on Friday announced decision to extend the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric vehicle (FAME) scheme by two years to March 31, 2024. The scheme, started in 2019 for promoting sales of electric vehicles, was supposed to end by 2022.

“The scheme is proposed to be implemented over a period of 3 years, w.e.f 1st April 2019, for faster adoption of electric mobility and development of its manufacturing eco-system in the country. Now with the approval of the competent authority, it is decided that FAME India Phase II scheme is extended for a period of two (2) years i.e. up to 31st March 2024," the Department of Heavy industries said in a notification.

Earlier this month, the Union government increased incentives on electric two- and three-wheelers to help boost broad-based adoption. According to a section of experts, this was a desperate move by the government to utilize the funds earmarked for the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (Fame) scheme, with the sale of EVs remaining muted for the past two years.

DHI announced a 50% increase in incentives for electric two-wheelers to 15,000 per kilowatt hour from 10,000 per kWh. According to the new rules, the cap on incentives will be limited to 40% of the total price compared to the earlier cap of 20%. The ministry of heavy industries has also mandated Energy Efficiency Services Ltd (EESL) to procure 300,000 electric three-wheelers for use by different authorities.

The public sector unit has been given the responsibility to procure electric buses for deploying across cities.

The Fame scheme was announced in 2019 with an outlay of 10,000 crore and the government expected to incentivize the purchase of 7,090 electric buses, 35,000 four-wheelers, 500,000 three-wheelers and 1 million two-wheelers. In reality, though, due to the high localization norms and other rules, most of the products in the segment did not qualify for the incentives. The ones that qualified did not get enough subsidies to close the price gap with combustion engine vehicles.

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