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The government has spent around 1,400 crore so far out of the 10,000 crore allocated under the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme, according to Arun Goel, secretary in the ministry of heavy industries .

The FAME-II scheme, designed to support the electrification of public shared transport and help create charging infrastructure, was supposed to end on 31 March 2022 but has been extended by two years till 31 March 2024, as it was unable to create the anticipated consumer demand for electric vehicles (EVs).

Goel said that after the incentive was increased in June last year, there has been robust growth in EV demand and incentive disbursement. With the recent increase in incentives for two-wheelers, sales have “skyrocketed" and the scheme is “taking off", the official said.

“Now on an average, 5,000 two-wheelers are incentivised per week. The incentive was earlier 10,000 per kilowatt-hour (kWh), now it has been increased to 15,000 per kWh," he said. Highlighting that the incentive payout has been doubled to 40% of the value of the vehicle, Goel said: “We are trying to encourage high-end products so that they become popular."

Speaking on the challenges faced by the FAME-II scheme, the secretary said that it takes time for any scheme to become popular, and that the work was interrupted due to Covid-19.

The first phase of FAME was launched in 2015 and FAME-II started in 2019 with a three-year timeline.

The government has taken up several initiatives to boost the adoption and manufacturing of EVs in the country, in line with its focus on environmental and climate change concerns.

EVs also come under the production-linked incentive (PLI) scheme for automobile and auto components with a budgetary outlay of 25,938 crore for a period of five years. The ministry on Friday announced the names of the approved applicants under the scheme.

Under the category of ‘new non-automotive investor’, the government selected bids from EV makers, Ola Electric Technologies, Axis Clean Mobility, Booma Innovative Transport Solutions, Elest Pvt Ltd, Hop Electric Manufacturing Pvt Ltd and Powerhaul Vehicle Pvt Ltd.

Further, the government last year also notified the Phased Manufacturing Program (PMP) to promote indigenous manufacturing of EVs and components.

The Union Budget for FY23 gave a major emphasis on the sector and increased the fund allocation for the FAME scheme over three-fold to 2,908.28 crore. The allocation in the last year’s budget was 800 crore.

With the budget giving a major emphasis on clean energy, EVs remained a core area for the shift towards robust public transport. Finance Minister Nirmala Sitharaman in her budget speech also announced that government will come up with a battery swapping policy, given the space constraint in urban areas for setting up charging stations at scale.

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