Electric Vehicle Promotion Scheme (EMPS) Extension and Updates

The Electric Vehicle Promotion Scheme (EMPS), initially scheduled to end on July 31, has been extended by two months, now concluding on September 30. Alongside this extension, the scheme's budget has been increased by nearly 50%, with a revised total outlay of INR 778 crore, up from the initial INR 500 crore. This increase in funds will support revised targets for the number of electric two- and three-wheelers eligible for purchase subsidies.  

Government Statement and Context

In an announcement from the Ministry of Heavy Industries, it was confirmed that the EMPS was initially set to run from April 1 to July 31. However, the government likely extended the scheme due to the lack of consensus on the third edition of the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) scheme. FAME II ended on March 31, and EMPS was introduced as a short-term solution until FAME III could be finalized. 

Industry Concerns and Budget Implications

The delay in finalizing FAME III has raised concerns, especially since the Union Budget for 2024-25 did not include direct announcements regarding the continuation of purchase subsidies or other benefits for promoting electric vehicles (EVs). The FAME scheme has been pivotal in supporting the EV sector, subsidizing the purchase of lakhs of electric two- and three-wheelers.
ETAuto reported ongoing deliberations between the Ministry of Heavy Industries and stakeholders about FAME III. If no consensus is reached, the government may further extend the EMPS beyond September 30.

Revised Targets for EMPS

With the extended EMPS, the scheme aims to support a total of 560,789 electric vehicles. This includes 500,080 electric two-wheelers (e-2Ws) and 60,709 electric three-wheelers (e-3Ws), comprising 13,590 rickshaws and e-carts, as well as 47,119 e-3Ws in the L5 category.

FAME II Recap and Future Prospects

FAME II Achievements

Launched in 2019, the second edition of the FAME scheme had an initial corpus of INR 10,000 crore, later increased to INR 11,500 crore. Over its five-year span, FAME II subsidized:
11.7 lakh e-2Ws (exceeding the target of 10 lakh e-2Ws)
4,600 electric buses (against a target of 7,000 e-buses)
1.3 lakh electric three-wheelers (a quarter of the target of 5 lakh vehicles)

Future Focus and FAME III

In pre-Budget discussions, officials from the Ministry of Heavy Industries indicated a shift in policy priority from subsidizing e-2Ws to promoting e-buses and e-trucks. A source close to the developments mentioned that FAME III is in progress but awaits approval from the Prime Minister's Office. The new edition of FAME is expected to include e-trucks for the first time, with a budgetary outlay similar to FAME II.