Govt's EV push?FAME II ends Mar 31, FAME-III likely in July budget

02 Apr 2024 CW Team

Originally introduced in 2019 for a three-year duration with a budget allocation of Rs 100 billion, the FAME II scheme aimed to bolster the electric vehicle market by supporting the deployment of 7,000 e-buses, 5 lakh e-3 wheelers, 55,000 e-passenger cars, and 10 lakh e-two wheelers. An additional Rs 15 billion was later allocated to the scheme. As of March 30th, 15,42,452 electric vehicles have benefited from subsidies under the scheme, comprising 13,64,929 two-wheelers, 15,71,71 three-wheelers, and 20,352 four-wheelers.

Tata Motors emerged as the primary beneficiary of FAME II for manufacturing e-3 and e-4 wheelers, while Ola dominated the e-two wheelers segment. A total of 221 electric vehicle models received benefits under the FAME II scheme. The budgeted allocation for FAME II was Rs 51.71 billion for the fiscal year 2023-24.

In response to a query in the Rajya Sabha, the Ministry of Heavy Industry stated that the entire budgeted allocation under FAME II was utilized within the initial three years, starting from 2019-20. There was a slight decrease in utilisation in 2022-23, but a significant gap was observed in 2023-24.

In this year's Interim Budget, the Finance Minister allocated Rs 26.71 billion for the FAME III scheme. However, details regarding this scheme are expected to be disclosed by the new government in the main budget scheduled for July 2024. This amount represents a reduction of approximately 44% compared to the allocation for the fiscal year 2023-24. Nonetheless, the industry anticipates that the government will increase this allocation in the main budget.

To encourage the adoption of electric vehicles nationwide, the Ministry of Heavy Industry (MHI) has approved 6,862 e-buses for various cities, state transport undertakings, and state governments for intra-city operations. Additionally, the ministry has sanctioned 2,877 EV charging stations across 68 cities in 25 states and union territories during the same period. However, only about 150 of these stations have been constructed and are operational.

The FAME II scheme, which facilitated the accelerated adoption and manufacturing of electric vehicles, is concluding today. The government has provided a total subsidy of Rs 115 billion under the scheme to both manufacturers and consumers. Originally introduced in 2019 for a three-year duration with a budget allocation of Rs 100 billion, the FAME II scheme aimed to bolster the electric vehicle market by supporting the deployment of 7,000 e-buses, 5 lakh e-3 wheelers, 55,000 e-passenger cars, and 10 lakh e-two wheelers. An additional Rs 15 billion was later allocated to the scheme. As of March 30th, 15,42,452 electric vehicles have benefited from subsidies under the scheme, comprising 13,64,929 two-wheelers, 15,71,71 three-wheelers, and 20,352 four-wheelers. Tata Motors emerged as the primary beneficiary of FAME II for manufacturing e-3 and e-4 wheelers, while Ola dominated the e-two wheelers segment. A total of 221 electric vehicle models received benefits under the FAME II scheme. The budgeted allocation for FAME II was Rs 51.71 billion for the fiscal year 2023-24. In response to a query in the Rajya Sabha, the Ministry of Heavy Industry stated that the entire budgeted allocation under FAME II was utilized within the initial three years, starting from 2019-20. There was a slight decrease in utilisation in 2022-23, but a significant gap was observed in 2023-24. In this year's Interim Budget, the Finance Minister allocated Rs 26.71 billion for the FAME III scheme. However, details regarding this scheme are expected to be disclosed by the new government in the main budget scheduled for July 2024. This amount represents a reduction of approximately 44% compared to the allocation for the fiscal year 2023-24. Nonetheless, the industry anticipates that the government will increase this allocation in the main budget. To encourage the adoption of electric vehicles nationwide, the Ministry of Heavy Industry (MHI) has approved 6,862 e-buses for various cities, state transport undertakings, and state governments for intra-city operations. Additionally, the ministry has sanctioned 2,877 EV charging stations across 68 cities in 25 states and union territories during the same period. However, only about 150 of these stations have been constructed and are operational.