Govt may extend Fame II incentive scheme for purchase of personal EV cars, e-bicycles

In what may come as a boon for people aspiring to ride on their own electric vehicles, the government is looking to extend the provisions of its subsidy scheme FAME II to the buyers of passenger cars meant for personal use.

Government sources said that they were also looking at including electric bicycles under the capital subsidy scheme seeing its growing popularity and the need to bring down its cost for customers.

The fresh inclusions would make the running Fame II or Faster Adoption and Manufacturing of Hybrid and EV scheme all-encompassing covering the entire range of electric vehicles being used both for personal and commercial use and public transport.

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At present, the Fame II scheme benefits cover only electric two-wheelers, three-wheelers, four-wheeled passenger vehicles and goods carrying vehicles. Under it, vehicles are provided with demand incentives that help to bring down their purchase price. FAME II had increased the benefit offered from Rs 10,000 per kWh to Rs 15,000 per kWh. That's a hike of 50 per cent.

The maximum subsidy cap is also increased to 40 per cent of the e-two-wheeler cost compared to 20 per cent earlier while the scheme is now running till March 31, 2024, from the earlier closure of March 31, 2022.

Sources said that for passenger cars purchased for personal use and e-bicycles the government may come with a revised benefit structure. But nothing on this has been worked out yet.

The SCALE committee or Steering Committee for Advancing Local Value-Add and Exports, a joint government-industry panel tasked with fast-tracking growth of the Indian manufacturing sector, has also batted for providing demand incentives for electric bicycles. In its report to the commerce ministry, the committee headed by Mahindra & Mahindra managing director Pawan Goenka has recommended a FAME-like incentive of Rs 5000 per unit for e-bicycles to reduce its cost at least by Rs 3,000.

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The FAME II scheme, introduced to drive greater adoption of EVs in India, was launched with a budget outlay of Rs 10,000 crore in April 2019, to support 7,000 e-buses, 5,00,000 e-three-wheelers, 55,000 e-passenger vehicles and a million e-two-wheelers.

As of now, about 1,24,415 vehicles have benefited under the scheme. This includes 99,652 electric two-wheelers, 23,059 electric three-wheelers and 1,693 electric four-wheelers. In terms of state-wise registrations, Karnataka (25,725 EVs), Tamil Nadu (19,222 EVs), Maharashtra (13,384 EVs), Uttar Pradesh (7,990 EVs), Rajasthan (10,010 EVs) and Delhi (8,897 EVs) are the leading states to avail benefits under the scheme.

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