FAME III Scheme Reveals Subsidy Structure and PLI Extension

The Ministry of Heavy Industries announced a one-year extension for the Production Linked Incentive (PLI) Scheme.

In a significant move to accelerate the adoption of electric vehicles (EVs), the Indian government is gearing up for the third phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) project. The government's commitment to the EV sector is obvious with the unveiling of the FAME III initiative, which is currently in its second phase, FAME II, and is expected to be completed on March 31, 2024.

Under FAME III, the government is proposing a substantial financial allocation of Rs 26,400 crore, signalling its intent to provide comprehensive support to the electric vehicle ecosystem. A portion of this budget, Rs 8158 crore, is set aside for 2-wheeler vehicles in the form of subsidies.

The remaining funds will be strategically utilized to incentivize the adoption of electric trucks, buses, 3-wheelers, and other types of electric vehicles. Reports suggest that the overall expenditure under FAME III could reach a total of Rs 3300 crore, reflecting the government's approach towards promoting a green and sustainable future in the automotive sector.

The forthcoming third phase is expected to introduce innovative measures to address existing challenges and further catalyze the growth of the electric vehicle industry in India.

In addition to the FAME project, the government has also provided positive updates regarding the Production-Linked Incentive (PLI) scheme for the auto industry. These updates are expected to create a conducive environment for manufacturers, promoting the development and production of electric vehicles, and ultimately contributing to a cleaner and greener transportation landscape in the country.

FAME III Subsidy Highlights

• Subsidies under FAME III extend to 2-wheelers, 3-wheelers, 4-wheelers, electric 3-wheelers, and electric buses in India.
• Subsidy amounts depend on the battery capacity of the vehicle.
• The government offers a Rs 10,000 subsidy per kilowatt hour of battery capacity.
• For example, a vehicle with a 5 kWh battery can receive a maximum subsidy of Rs 50,000.

Also Read: Electric Three-Wheeler Sales Report: YC Electric Vehicle Tops E-rickshaw Market with 38,452 Units Sold

PLI Scheme Extension

• The Ministry of Heavy Industries announced a one-year extension for the Production Linked Incentive (PLI) Scheme.
• Auto industry benefits under the PLI Scheme will now continue until 2028, a year longer than initially planned (till 2027).

FAME 3 Beneficiaries

• FAME 3 scheme primarily benefits citizens of India and electric vehicle manufacturers.
• Aims to encourage the purchase of electric vehicles by offering subsidies to consumers and providing other benefits to manufacturers.
• A positive step towards promoting sustainable and eco-friendly transportation in the country.