FAME 3 to Be Launched Soon with ₹10,000 Crore, Focus on Hybrids Over E-Cars

Key Highlights:

•    FAME 3 set to roll out soon with INR 10,000 crore budget.
•    Electric two-wheelers, three-wheelers, and buses to receive financial incentives.
•    Decision pending on the inclusion of electric cars, especially for institutional buyers.
•    The scheme requires a fresh certification for incentives, with an initial two-year validity.
•    Hybrid cars may be supported, while electric cars likely excluded from subsidies.
•    EMPS bridges the gap between FAME 2 and FAME 3, offering reduced incentives until July.

FAME 3 is expected to be released soon with an INR 10,000 crore budget, with support for hybrids but not e-cars.

According to a senior official, the third edition of the Modi government's FAME (Faster Adoption and Manufacturing of Electric Vehicles) incentive scheme, worth approximately INR 10,000 crore. It is expected to be implemented within the first 100 days of the new government's tenure next month.

According to the official, the initiative will provide financial incentives for electric two- and three-wheelers, as well as government-owned buses.

However, a final decision on whether to include electric cars in the FAME 3 plan, especially for institutional buyers like taxi companies, has not been made yet, according to the official.

FAME 3 will continue the efforts of the Electric Mobility Promotion Scheme (EMPS), which was introduced after the previous version, FAME 2, ended. EMPS, with a budget of INR 500 crore, is temporary and aims to support electric two-wheelers and three-wheeler until July. 

The primary goal of FAME schemes is to encourage local manufacturing and sales of electric vehicles by offering incentives to buyers.

"Since it (FAME-3) will be a new scheme, all companies seeking incentives on sale of electric vehicles would have to apply for fresh certification," added the official.

Under FAME 3, companies will need new certifications to qualify for incentives. It's expected to be valid for two years initially, compared to the five years of FAME 2. 

The government had incentivized the acquisition of 7,000 electric buses through FAME 2. The new initiative is expected to boost the number of electric bus subsidized for purchase by State Transport Undertakings.

However, electric cars might not receive subsidies under FAME 3, even for commercial use, as discussions are ongoing about whether they need such incentives. Hybrid cars might be supported if they meet certain criteria, including price caps.

"The government is also bringing in new guidelines in the new scheme and companies seeking to avail benefits would have to seek re-certification," an additional official stated.

Under the EMPS program, the government offers incentives to encourage the purchase of electric vehicles. For electric two-wheelers, the incentive is up to INR 10,000 (previously INR 22,500 under FAME 2).

For electric three-wheelers, the incentive is up to INR 50,000 (previously INR 111,505). Both types of vehicles get INR 5,000 per kilowatt-hour (kWh) of battery capacity.

The goal of EMPS is to support the sale of 372,215 electric vehicles, which includes 333,387 two-wheelers and 38,828 three-wheelers. To promote the use of the latest technology, only vehicles with advanced batteries are eligible for these incentives.

Also Read: Government Launches Electric Mobility Promotion Scheme 2024 to Accelerate Green Revolution

CMV360 Says

While the continuation of government support for electric vehicles is encouraging, the exclusion of electric cars, particularly for commercial operations, from FAME 3 might slow down their adoption. 

It's crucial for the government to carefully consider the impact of its policies on the growth of the electric vehicle market and ensure that incentives are aligned to reduce carbon emissions and promote sustainable transportation.