The third edition of the Modi government’s flagship electric vehicle (EV) incentive scheme, FAME (Faster Adoption and Manufacturing of Electric Vehicles), is on the brink of introduction with a substantial outlay of ₹10,000 crore.
This iteration, expected to roll out within the first 100 days of the new administration assuming office next month, will concentrate on bolstering electric two-wheelers, three-wheelers, and government-owned buses.
A senior official indicated that while the scheme will extend financial incentives to electric two-wheelers and three-wheelers, as well as buses operated by state transport undertakings (STUs), the inclusion of electric cars remains undecided. “A final decision on whether to include electric cars, including those for institutional buyers such as taxi aggregators, is still pending,” the official stated. The forthcoming FAME 3 scheme will mirror its predecessor, FAME 2, which lapsed in March 2024. FAME 2 provided a 15% subsidy on the sale price of electric scooters. The proposed FAME 3 will be presented to the Union Cabinet for approval shortly after the new government takes charge in June. In the interim, the Electric Mobility Promotion Scheme (EMPS), with an allocation of ₹500 crore, has been supporting the sales of electric two-wheelers and three-wheelers until July.
FAME 3 is expected to have a duration of two years for the incentivised sales period, a reduction from the five-year period under FAME 2. The scheme aims to escalate the number of subsidised electric buses available to STUs beyond the 7,000 units facilitated under FAME 2. However, electric cars, even those intended for commercial use, are likely to be excluded from the subsidy scope.
The deliberations on subsidising electric cars continue, with the current proposal under FAME 3 suggesting incentives for vehicles priced below ₹15 lakh, akin to FAME 2. Hybrid vehicles might also receive support under the new scheme, provided they adhere to the stipulated price cap. The government is set to introduce fresh guidelines under FAME 3, necessitating companies to seek re-certification for eligibility. This move aims to ensure that only advanced technology vehicles benefit from the incentives. Under the temporary EMPS, incentives are capped at ₹10,000 per electric two-wheeler and ₹50,000 per electric three-wheeler, with both categories receiving ₹5,000 per kilowatt-hour (kWh).
The overarching objective of the FAME scheme is to stimulate local manufacturing and sales of electric vehicles by offering demand incentives to end customers. The scheme’s targeted support for electric two-wheelers and three-wheelers, along with government buses, underscores the government’s commitment to fostering sustainable and eco-friendly urban mobility solutions. With FAME 3, the government continues to drive its vision of a greener, more efficient transportation infrastructure, aligning with global trends towards sustainable mobility and reducing carbon emissions. The anticipated rollout of FAME 3 marks a significant milestone in India’s journey towards widespread adoption of electric vehicles.
