The anticipation mounts as the unveiling of the third iteration of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme looms closer, with expectations of an INR 10,000 Cr budget allocation in the upcoming Budget announcement.
Setting the Stage
With the new union cabinet poised to continue its support for electric vehicles (EVs) through demand incentives, reports have been rife regarding the imminent launch of FAME-III. Despite lingering uncertainties following the challenges faced by its predecessor, FAME-II, there appears to be renewed commitment from the government to bolster the EV ecosystem.
Government’s Deliberation
An insider from the Ministry of Heavy Industries (MHI) revealed that a comprehensive plan for FAME-III has already been submitted to the Prime Minister’s Office (PMO) for review. The final decision regarding the scheme’s implementation will be made in due course, with careful consideration given to the prevailing fiscal landscape.
FAME-III Objectives
The proposed FAME-III scheme is expected to extend support to electric vehicles across various categories, including two-wheelers, three-wheelers, and four-wheelers. Speculation suggests a particular emphasis on enhancing incentives for electric three-wheelers and bolstering public transportation infrastructure with the inclusion of electric buses.
Learning from Past Experiences
Reflecting on the challenges encountered during the tenure of FAME-II, wherein certain OEMs were found to have misused subsidies, the government took corrective measures. This included a reduction in incentives for electric two-wheelers. Such experiences underscore the importance of implementing robust monitoring mechanisms to ensure transparent and effective utilization of funds.
Current Landscape and Future Vision
Despite calls for an extension of FAME-II or the introduction of FAME-III during the interim budget of 2024-25, no such announcements were made. Instead, the government opted to allocate resources towards a new Electric Mobility Promotion Scheme 2024, signaling a shift in strategy. However, voices within the industry, including notable figures like Amitabh Kant, advocate for continued policy support until 2030 to realize the ambitious EV30@30 vision.
Growth Trajectory of EVs
The EV market in India has witnessed significant growth in recent years, driven largely by government incentives. Registrations have surged, with notable increases in two- and three-wheeler segments. In 2023 alone, registrations surpassed the 15 Lakh mark, reflecting a growing consumer appetite for electric mobility solutions.
