FAME II Scheme Finds Only Five Takers In Automobile Manufacturers

SUMMARY

Under FAME II, the government has earmarked INR 10,000 Cr worth subsidies

FAME II scheme will be applicable mainly to vehicles used for public transport

NITI Aayog had proposed that only electric vehicles should be sold in India by 2030

As India works towards achieving 30% emobility by 2030, government’s ambitious Faster Adoption and Manufacturing of Electric Vehicles in India (FAME India) scheme has been slow to take off with automakers.

In the last three months, since FAME II was approved, only five automobile manufacturers [OEMs] have registered themselves in this scheme.

On Monday (July 1), the minister of heavy industries and public enterprises Arvind Ganpat Sawant told Rajya Sabha that these five OEMs are looking to avail benefit of demand incentive for their registered vehicles as per scheme’s notification.

The minister also emphasised that the second phase of FAME scheme will put greater emphasis on providing affordable and environment friendly public transportation options for the masses. For this, the scheme will be applicable mainly to vehicles used for public transport or those registered for commercial purposes in e-3W, e-4W and e-bus segments.

Under FAME II, the government has proposed to invest INR 10,000 Cr ($1.4 Bn) over three years to support 10 Lakh two-wheelers, 5 Lakh three-wheelers, 55K four-wheelers, and 7K buses that operate on lithium-ion batteries or other electric power-trains. It also added for deployment of 5K electric buses.

The minister also said that privately owned registered e-2W will also be covered under the scheme as a mass segment. This would mean a big win for Indian two-wheeler EV startups such as Ather Energy, Yulu, Okinawa, and more.

The Indian electric vehicle industry recorded sale of 7.59 Lakh units in India in FY2019 as opposed to 56K (excluding three vehicles) in FY2018. This included the sale of 1.2 Lakh two-wheelers, 6.3 Lakh three-wheelers and 3,600 passenger vehicles. However, after implementation of the FAME II scheme, India recorded near-zero sales of electric two-wheelers, due to the FAME II recertification rules.

The minister also talked about the creation of charging infrastructure to be supported in selected cities and along major highways to address range anxiety among users of electric vehicles. FAME II had proposed to set up 2.7K charging stations, with the availability of at least one charging station in a grid of 3Kmx3Km.

Time and again, a majority of the industry players have expressed reservations about FAME II. The issues being sprouted are lack of proper infrastructure, lack of adequate technology and shortage of specialised human resource in the electric vehicle industry.

It is also to be noted that NITI Aayog had proposed that only electric vehicles should be sold in India by 2030. For this, it called for full electric transition for three-wheelers by 2023 and two-wheelers with an engine capacity less than 150 CC by 2025. With the short fall of participation from industry players under FAME II and rising concerns, the scheme has a lot more to sort.