FAME II May Offer Incentives On Purchase Of Electric Buses Only

The second phase of FAME II (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) scheme may offer incentives on purchase of electric buses only. The department of heavy industries (DHI) is said to have recently held a meeting and decided to incentivise only electric buses.

Currently, incentive is being offered on purchase of hybrid and electric vehicles (two-wheelers and three-wheelers) under FAME India- I. Battery operated scooters and motorcycles are eligible for incentives ranging from INR 1,800 to INR 29,000, while in three-wheelers, it is between INR 3,300 and INR 61,000.

The Indian government launched FAME scheme in 2015 expired on March 31, but was later extended by a few more months. Inc42 had earlier reported that the Centre is ready to invest $1.3 Bn (INR 9,381 Cr) over five years to roll-out FAME II scheme.

As part of the funding, the government may as well offer incentives of up to INR 2.5 Lakh to those scrapping old petrol or diesel-fired vehicles. Similarly, buyers of electric cars that will operate as taxis are expected to get sops of (INR 1.5 to 2.5 lakh) for vehicles that cost up to INR 15 Lakh.

Further, under FAME II, large EV components have also been proposed to be given a capital investment subsidy at a rate of 20% to 25%. These large EV components — such as motors, drive powertrains, and controllers — are currently not covered under the Modified Special Incentive Package Scheme (MSIPS) of the ministry of electronics and information technology.

At the same time, the department of heavy industries has set a target of increasing the number of EVs in overall new vehicle sales to 4% in the next five years, starting from 2018-19.

Further, the Centre has also proposed to invest over $14.7 Mn to set up EV charging stations. The final cabinet note has been prepared for implementing the FAME-II and may soon be taken up for the Union cabinet to give a green signal.

A policy on electric vehicles charging infrastructure that proposes granting subsidies to PSUs for setting up a basic charging station network in big cities and highways is also under discussion with the Power Ministry.

Earlier in June this year, the Society of Electric Vehicles Manufacturers (SMEV) urged the Centre to make short-term policies to help electric vehicle manufacturers.

The electric vehicle manufacturers will also submit specific suggestions to different ministers and the Niti Aayog regarding promotion of various aspects of electric mobility in September this year.

[The development was reported by Money Control]