The second phase of the FAME 2 scheme that is expected to drive the government's mission to have 25% per cent of all vehicles sold in 2030 to be electric. The second phase of the Faster Adoption and Manufacture of Electric Vehicles is expected to launch around this month and have a total outlay of Rs 5,500 crore spanning over the next five year. While the first phase was mainly targetted at bringing electric mobility to public transport, the second phase is likely to bring an array of incentives, exemptions and registration benefits to make consumer electric vehicles more viable for manufacture and sale in India. In fact, this phase is also likely to see the inclusion of fully electric vehicles, hybrids and even mild hybrids.
Interestingly no target has been set for EVs over the next five years. Instead, the scheme will focus on boosting demand for EVs and creating the charging infrastructure, said a senior government official to the PTI. "No standardisation of batteries is being introduced under the scheme, wherein one type of battery is suitable for an electric vehicle. However, vehicles fitted with only advanced batteries will be eligible for demand incentives.
"Moreover, once introduced, the incentives will be subject to annual review due to the expected reduction in the battery cost," said another senior official to the PTI.
One of the more controversial additions to the FAME would be a cess on Vehicles driven by Internal combustion that could now be taxed between f Rs 500-Rs 25,000. This would mean an Electric Vehicle buyer could avail subsidy of Rs 25,000 for an electric two-wheeler, Rs 40,000 for electric three-wheeler and Rs 50,000 for an electric car in the first year of the implementation. As of now, this has also been put on the back burner as of now, the official said.
However, the amount of incentives proposed in the scheme for buses may further be subject to competitive bidding among original equipment manufacturers. The Department of Heavy Industries may make incentives a pre-condition for states to be included in the second phase of the Faster Adoption and Manufacturing of Electric (and Strong Hybrid) Vehicles (FAME) scheme.
As of now, the government think tank Niti Aayog is working together with several agencies to ensure the scheme is holistic and really creates an environment that is conducive to electric vehicles. The second phase of the scheme will be rolled out through verticals including demand incentives, network of charging stations, pilot projects for innovative proposals, technology, a technology platform for e-mobility, and its administration.