Govt set to clear ₹10,900 crore for rechristened electric vehicle subsidy scheme

New Delhi: The government is expected to approve a ₹10,900 crore electric vehicle incentive scheme, marking the third phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) policy but under a new name, two people with direct knowledge of the matter told Mint.

The new scheme, expected to be announced in the cabinet briefing on Wednesday, will focus on boosting the adoption of electric buses, trucks, and e-two and three-wheelers, as well as enhancing charging infrastructure across the country.

The scheme, expected to be christened PM e-drive, will allocate ₹4,300-4,400 crore to incentivize electric buses, including inter-city models, making it the largest segment of the subsidy outlay.

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Additionally, about ₹500 crore each is expected to be earmarked for electric trucks and cars. The scheme could also include e-ambulances and e-police vans to expand EV adoption in critical service sectors. 

The government had been on the fence about including electric cars in the FAME-III scheme, but Tata Motors Ltd, the country's largest electric carmaker, has been lobbying the Prime Minister's Office for the inclusion of the electric cab segment in the scheme.

Charging infrastructure development is expected to receive a substantial ₹1,000-1,200 crore boost, addressing one of the key bottlenecks in EV deployment. Mint had reported in July that this investment in infrastructure is critical to support the growing EV ecosystem, and could receive an up to ₹2,000 crore outlay in the scheme.

In addition to the subsidies, the government is expected to announce a payment security mechanism for electric buses, which will reduce financial risks for bus operators and promote the electrification of public transportation networks.

The new scheme will replace the ongoing Electric Mobility Pilot Scheme (EMPS), signaling the government's sustained focus on achieving its clean energy goals through broader EV adoption.

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