Upcoming FAME 3 Scheme to Offer INR 10,000 Crore for Hybrid Vehicles

The third edition of the Modi government's flagship electric vehicle incentive scheme, FAME (Faster Adoption and Manufacturing of Electric Vehicles), is set to focus on electric two-wheelers, three-wheelers, and government buses. With an allocation of INR 10,000 crore, this scheme aims to bolster electric vehicle adoption in India. The inclusion of electric cars for institutional buyers like taxi aggregators remains undecided. 

Launch Timeline and Financial Outlay

The FAME 3 scheme, with a substantial outlay of INR 10,000 crore, is anticipated to be rolled out within the first 100 days of the new government taking charge. According to a senior official, the scheme will provide financial incentives to electric two-wheelers, three-wheelers, and government-owned buses.

Scope and Coverage

Electric Two-Wheelers and Three-Wheelers

The scheme will extend financial incentives to encourage the adoption of electric two-wheelers and three-wheelers. This continuation aims to support local manufacturing and sales of electric vehicles.

Government-Owned Buses

Government-owned buses will also be included in the incentive scheme, reflecting the administration's commitment to promoting sustainable public transportation.

Undecided Inclusion of Electric Cars

A final decision on the inclusion of electric cars, particularly for institutional buyers such as taxi aggregators, is still pending. Hybrid cars might receive support under FAME 3 if passenger cars are included, subject to adhering to the price cap.

Transition from FAME 2 to FAME 3

Temporary EMPS

FAME 3 will follow the Electric Mobility Promotion Scheme (EMPS), which was introduced as a temporary measure after FAME 2 ended on March 31. EMPS, with an allocation of INR 500 crore, supports the sales of electric two-wheelers and three-wheelers for four months until July.

Previous Incentives Under FAME 2

FAME 2 had provided a 15% subsidy on the sale price of electric scooters. Under EMPS, incentives are reduced to INR 10,000 per electric two-wheeler (down from INR 22,500 in FAME 2) and up to INR 50,000 per electric three-wheeler (down from INR 111,505). Both categories receive incentives of INR 5,000 per kilowatt-hour (kWh).

New Guidelines and Certification

Fresh Certification Requirement

As FAME 3 will be a new scheme, all companies seeking incentives on the sale of electric vehicles must apply for fresh certification. This ensures compliance with the latest standards and guidelines. 

Duration and Validity

FAME 3 is initially expected to be valid for sales made over a two-year period, a shorter time frame compared to the five years under FAME 2. This shorter duration aims to accelerate the adoption and transition to electric mobility.

Carbike360 Says

The FAME 3 scheme aims to continue the momentum of electric vehicle adoption in India, focusing on two-wheelers, three-wheelers, and government buses. While the inclusion of electric cars for institutional buyers remains undecided, the scheme's financial incentives and fresh guidelines are poised to drive the growth of the electric vehicle market.