The Faster Adoption & Manufacturing of Electric Vehicles (FAME) 3 scheme is in its final stage of discussions before the government formally announces the validity of the policy.
In fact, Financial Express Online learns that electric four-wheelers, which account for a percentage of total FAME 2 subsidy claims, might be excluded from FAME 3 incentives.
To put into perspective, around 850,000 FAME 2 eligible EVs (two-, three-, four-wheeler) were registered in the country from FY2020 till mid-February 2024. Of this, electric two-wheelers accounted for almost 89 percent of sales, electric three-wheelers were around 10 percent, and 11,500 electric four-wheelers were registered or just about a percentage.
Electric four-wheelers under Rs 15 lakh are at the moment, eligible for FAME 2 subsidy. These electric four-wheelers can claim an incentive of Rs 10,000/kWh with a cap of 20 percent of the total cost of the vehicle. Tata Motors has been the biggest beneficiary under the scheme. The electric car maker currently sells the Tigor.ev, Tiago.ev, Nexon.ev, Xpres-T and Punch.ev.
It is also important to note that a lot many new players are looking to enter the sub-Rs 15 lakh segment and were pinning their hopes on the FAME 2 subsidy to make the EVs lucrative for the consumers.
There are still expectations that the government may consider offering some incentives or sops to the electric four-wheelers. Interestingly, electric tractors and electric trucks are expected to be added to the beneficiary list.
On the other hand, Financial Express Online, also learnt that the proposed additional infusion of Rs 500 crore in the FAME 2 subsidy will be from the Rs 10,000 crore allotment of FAME 3 subsidy expected to be announced in July 2024.
The additional Rs 500 crore outlay will primarily focus on electric two-wheelers (more than 60 percent) and electric three-wheelers (L3 and L5).
This is due to the fact that while 850,000 electric vehicles have been incentivised under FAME 2 scheme, close to 520,000 EVs and counting are still awaiting their dues. This brings the total number of FAME 2 eligible EVs to have crossed around 13.65 lakh mark in the country.
