Electric vehicle manufacturers want clarity on phase II of FAME scheme

The government had launched the FAME India scheme in 2015 with an aim to promote eco-friendly vehicles offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars

By: | Updated: July 25, 2017 3:18 PM

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Electric vehicles manufacturers' body SMEV today expressed concern over lack of clarity over the fate of electric vehicles promotion scheme FAME, which is coming to an end in September. The Society of Manufacturers of Electric Vehicles (SMEV) also asked the government to address "anomaly" regarding batteries for electric two-wheelers which have become costlier when sold separately under GST at a tax rate 28 per cent as against 12 per cent when sold with the vehicles. "The EV (electric vehicles) industry is having some anxious moments as FAME 1, the current EV incentive scheme is coming to an end in September 2017 and FAME 2 is nowhere in sight," SMEV Director Corporate Affairs Sohinder Gill said in a statement. The industry should know whether there could be any abrupt stoppage or tapering of FAME 1 initiatives that may adversely affect the business plans of the existing players,
he added. The government had launched the FAME India scheme in 2015 with an aim to promote eco-friendly vehicles offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.
It envisaged Rs 795 crore support for the first two fiscals. The Phase I of the scheme was originally scheduled to
end in March this year but has been extended to September 30.

The scheme is part of the National Electric Mobility Mission Plan (NEMMP). It is being administered by the Heavy
Industries Ministry. Commenting on batteries for electric two wheelers, Gill said lithium batteries are usually being sold separately from the electric two wheelers to give a choice of the batteries at the point of sale. "Such batteries have become significantly costlier because of the 28 per cent GST, leading to a big dampener for the electric two wheeler customers," he added. While lauding government's decision to produce only EVs by 2032, Gill said: "The whole world is closely watching us and it is important that some big and solid actions to accelerate the adoption of EVs are implemented at the earliest."

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