New Subsidy Scheme for Electric Trucks and Buses Likely to be Introduced

Key Highlights:

• Medium to heavy e-trucks to get 20-25% price cuts under new FAME-III subsidy.
• Hybrid passenger vehicles likely excluded from FAME-III subsidies.
• E-buses in nine large cities to be included in FAME-III.
• FAME-III to have a Rs 9,500 crore outlay over two years, similar to earlier phases.
• Electric Mobility Promotion Scheme replaces FAME temporarily with a Rs 500 crore outlay.

Medium to heavy e-trucks are likely to be included in a new subsidy system called FAME-III, which the government may implement later this year. Currently, the price of such electric vehicles is between Rs 70 and Rs 90 lakh, and it is likely to drop by 20-25% after the subsidies.

According to sources, hybrid passenger vehicles may be excluded from receiving subsidies. The program may also include e-buses for nine cities with populations greater than four million.

According to reports, the scheme's minimum cost is estimated to be around Rs 9,500 crore over two years. FAME-III will have a largely similar structure to preceding phases. 

FAME III will continue to incorporate electric two- and three-wheelers, as well as the development of charging infrastructure. The domestic value addition targets will also be present.

Between April and July, FAME was replaced by an Electric Mobility Promotion Scheme (EMPS) worth Rs 500 crore. It intends to provide subsidies to consumers who purchase electric two-wheelers, electric three-wheelers, and e-rickshaws.

FAME-II, which cost Rs 10,000 crore and ended on March 31, was able to subsidise over one million two-wheelers, around 150,000 three-wheelers, and 17,000 odd public transport four-wheelers.

Subsidies under the system ranged from 15% to 25% across segments.

Also Read: Kalyani Powertrain, Revfin, and Bluwheelz Partner to Introduce retrofitted Electric Trucks in India

CMV360 Says

Introducing FAME-III with a focus on electric trucks and buses is a positive step towards promoting cleaner transportation. While it's good to see heavy vehicles being included, the exclusion of hybrid passenger vehicles might be a missed opportunity to push for more eco-friendly vehicles. 

The success of FAME-II shows that subsidies can significantly boost the adoption of electric vehicles, and a similar outcome can be expected from FAME-III if implemented effectively.