FAME-II to offer incentives for EVs from next month

New Delhi: From April, up to 10 lakh electric two-wheelers will get subsidy of Rs 20,000 each while 35,000 fully electric cars can avail benefit of Rs 1.5 lakh under the newly notified FAME-II scheme, reducing their prices for buyers.

The second phase of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME-II) will be implemented for three years starting next month with a Rs 10,000 crore outlay.

It has also envisaged providing support to 7,090 e-buses (having an ex-factory price of up to Rs 2 crore) with an incentive of up to Rs 50 lakh each, according to a notification issued by the Heavy Industries Ministry.

Moreover, 5 lakh e-rickshaws having ex-factory price of up to Rs 5 lakh are set to get incentive of Rs 50,000 each.

As per the notification, incentives of Rs 1.5 lakh each to 35,000 electric four-wheelers with an ex-factory price of up to Rs 15 lakh, and support of Rs 13,000 each to 20,000 strong hybrid four-wheelers with ex-factory price of up to Rs 15 lakh will be provided.

The automobile industry has hailed the government's move to announce the much awaited FAME-II scheme ahead of kicking in of the code of conduct for general elections, as further delay would have meant it could be rolled out only after the formation of the next government.

"This is a well-timed opportunity taken. There is continuity as there is no break between FAME-I and FAME-II," Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur said.

The FAME-II scheme will have a Rs 1,500-crore outlay in 2019-20; Rs 5,000 crore in 2020-21 and Rs 3,500 crore in 2021-22.

It will cover buses with EV technology; electric, plug-in hybrid and strong hybrid four wheelers; electric three-wheelers including e-rickshaws and electric two-wheelers.

"Now we have a road map for the next three years. The government has done its part and it is for the auto industry to perform now," Mathur said.

Considering that in FAME-I, the allocation was around Rs 800 crore, in the second phase it is a huge jump, which is a big boost for the industry, he added.

Expressing similar views, Ather Energy Chief Business Officer Ravneet Phokela said, "Overall, FAME-II is a well-honed scheme that focuses on the key consumer adoption drivers, and also encourages local manufacturing of high-quality products; exactly what the EV industry needed at this stage."

He further said the decision to link battery capacity to subsidy is a great move since it will ensure influx of high-performance, quality vehicles.

"The regulation that mandates players to provide at least 3 years of comprehensive warranty will encourage serious players to invest in the entire component cycle," Phokela said. This, combined with the emphasis on local sourcing, is bound to aid automakers to invest in building a sustainable production ecosystem, he added.