GOVERNMENT IS SET TO LAUNCH FAME III IN THE NEXT 1 TO 2 MONTHS

The third phase of the FAME Scheme will take over from the EMPS(Electric Mobility Promotion Scheme) 2024, which started in April this year and is set to end by the end of September to promote the sale of electric 2- wheeler and 3- wheeler in the country.

The FAME-III scheme is a plan designed to support the shift to electric vehicles (EVs) and to help build more charging stations across the country. Its goal is to make EVs more popular and convenient for everyone by ensuring there's plenty of places to charge them. 

G20 Sherpa Amitabh Kant mentioned that the government is working on various policies to promote the use of electric vehicles in the country. They are thinking about ways to make it easier and more attractive for people to switch to electric cars.

Amitabh Kant said that our government has set the tax on electric vehicles at just 5%, while hybrids are taxed at 48%. 

The Government policy is to encourage more electric vehicles by using all available tools, including CAFE(Corporate Average Fuel Efficiency) standards. Government is committed to make India a leading destination for green mobility.

Meanwhile, the Minister for road transport and highways, called on the finance ministry and state officials to lower the GST on flex fuel vehicles to 12%. Currently , the gst on regular internal combustion engine (ICE) vehicles and hybrids is 28%, while electric vehicles (EVs) are taxed at 5%. This move aims to make flex-fuel vehicles more affordable and promote their adoption.

While there will be new incentives for electric two wheelers(e2W) and electric 3 wheeler(e3W), however no incentives will be provided for electric four wheeler(e4W) and electric buses under the new scheme. Officials explained this decision is due to the fact that electric 4-Wheeler and buses are already covered by existing programs, such as the Auto PLI and PM-eBus Sewa Scheme.

Fame III scheme is likely to benefit Indian auto sector and economy in several ways

By providing incentives for electric vehicles, the fame III scheme encourages consumers and businesses to switch to EVs. This transition can lead to increased demand for EVs, stimulating growth in the auto sector and creating jobs.

The focus on supporting EVs can drive investment in local manufacturing of batteries and EV components. This strengthens the domestic supply chain, reduces dependence on imports, and fosters innovation within the auto industry.

By incentivizing EV adoption and infrastructure development, the scheme can spur economic activity across related sectors, including infrastructure , technology, and energy. This can lead to job creation, increased industrial activity, and overall economic growth.

The scheme promotes the use of cleaner energy vehicles, which helps reduce air pollution and greenhouse gas emissions. This contributes to improved public health and aligns with India's environmental goals.

Overview of FAME I and FAME II Schemes and related data

Government data reveals that the FAME I scheme supported around 2,78,000 pure electric vehicles(EVs) with incentives totalling Rs. 343 crore. The FAME II scheme, which began in April 2019 with a budget of Rs. 10000 crore for three years, has been extended to March 2024.

EV sales have surged by over 45% this year, despite cuts in subsidies and regulatory changes. Total EV registration in 2023 has reached nearly 1.5 million units, up from just over 1 million last year. This growth has increased the overall EV market share in INDIA to 6.3%, up from 4.8% in 2022.

The FAME I and FAME II schemes have significantly boosted electric vehicle adoption in India, with sales surging and market penetration rising to 6.3%. The upcoming FAME III scheme aims to further drive growth, focusing on 2-wheeler and 3-wheelers while continuing support through existing programs for 4-wheelers and buses.