FAME 3 Scheme: What to Expect in the New Phase of Electric Mobility Incentives

Key Highlights:

• The third phase of the FAME scheme is expected to be finalized within one or two months.
• FAME 3 will replace the temporary Electric Mobility Promotion Scheme (EMPS), expiring at the end of September.
• The EMPS, with a Rs 500 crore budget, was introduced after FAME 2 ended in March 2024.
• FAME 2, initially launched in 2019 with Rs 10,000 crore, was extended with an additional Rs 1,500 crore to support various electric vehicles.
• There is strong industry support for continued subsidies to drive electric vehicle adoption.

According to Minister of Heavy Industries HD Kumaraswamy, the government expects to complete the third phase of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) project within the next month or two.

"Several proposals are being made for FAME 3. Even the Prime Minister's Office has made some suggestions," he stated on the sidelines of ASSOCHAM's National Conference on Electric Mobility today.

Last month, the minister said that work on FAME 3 was approximately at completion stage. When asked about the timing for the scheme's debut, the minister stated, "It will be cleared within one month or two."

The third phase of the FAME scheme will replace the interim Electric Mobility Promotion Scheme (EMPS) 2024, which will expire at the end of September.

The EMPS initiative, which was initially valid for four months and then extended for two more months, was introduced with a total outlay of Rs 500 crore after the FAME 2 scheme expired on March 31 to assure the continuation of incentives for electric two and three-wheelers.

The FAME 2 project was launched in 2019 with an initial spend of Rs 10,000 crore over three years, concluding in 2022. It was then extended till March 2024 with an additional cost of Rs 1,500 crore. 

Initially, the initiative aimed to assist 10 lakh electric two-wheelers, 5 lakh electric three-wheelers, 55,000 passenger cars, and 7,000 electric buses.

Several new-age OEMs, particularly those that manufacture two-wheelers, and industry associations have urged the government to keep subsidies intact. The scheme's demand subsidy has played an important role in accelerating the country's early adoption of electric vehicles.

Also Read: Volvo to Launch Long-Range FH Electric Truck in 2025

CMV360 Says

The FAME 3 scheme is great news for India’s electric vehicle industry. It’s exactly what’s needed to keep things moving forward and support both the makers and buyers of electric vehicles. Ongoing support will make it easier for more people to buy electric and help the industry keep growing.