Government to launch FAME-3 subsidy scheme: Plans to allocate Rs.10,000 Cr

Faster adoption and manufacturing of electric vehicles (FAME), the government's premier electric vehicle incentive program spearheaded by Prime Minister Narendra Modi, is getting ready for its third iteration, which would come with a hefty budget of almost Rs 10,000 crore. The plan is anticipated to be implemented within the first 100 days of the new government's administration taking office next month, per a story published in The Economic Times. Financial incentives would be provided by FAME-III to encourage the acquisition of government-owned buses and electric two- and three-wheelers. It is still up for debate, though, whether or not to expand the incentives to include electric vehicles, even those purchased by institutional purchasers like taxi aggregators.

The FAME-III program is intended to take over from FAME-II, which came to an end in March 2024. Soon after the new administration takes office in June, it will be brought to the Union Cabinet for approval. A fifteen percent subsidy was offered on the selling price of electric scooters under FAME-II. The electric mobility promotion scheme (EMPS), which was implemented as a stopgap measure when FAME-II concluded on March 31, will carry on the work started by FAME-III

With a total budget of Rs 500 crore, EMPS intends to bridge the gap until the new program is implemented by supporting the sales of electric two- and three-wheelers through July. The government offers incentives under EMPS of up to Rs 10,000 for electric two-wheelers, which is less than Rs 22,500 under FAME-II, and up to Rs 50,000 for electric three-wheelers, which is less than Rs 111,505 for each one. An incentive of Rs 5,000 per kilowatt-hour (kWh) is given to both categories. The goal of EMPS was to assist in the sale of 372,215 electric vehicles, comprising 38,828 three-wheelers and 333,387 two-wheelers. Only vehicles with cutting-edge batteries are eligible for incentive benefits, which encourage the adoption of new technology.

The FAME initiative, which was first introduced to stimulate local production and sales of electric vehicles through consumer demand incentives, is about to enter its third iteration. Companies hoping to receive incentives for electric vehicle sales will have to go through a new certification process in light of the upcoming launch of FAME-III, while the government gets ready to create revised regulations. Initially, FAME-III is anticipated to have a two-year validity period for sales, as opposed to FAME-II's five-year validity. The government has provided incentives for the acquisition of 7,000 electric buses through FAME-II. This figure is anticipated to rise under the new plan, which would provide State Transport Undertakings (STUs) greater subsidies for electric buses they buy.

Subsidies for electric cars, including those used for business, may not be included in FAME-III. The new plan involves providing incentives, such to those under FAME-II, for electric cars priced below Rs 15 lakh. If passenger automobiles are part of the program, hybrid cars may also be supported as long as they stay under the price cap. It's still up for debate whether or not electric cars will be included.