Your browser is currently blocking notification.
Please follow this instruction to subscribe:
X
Notifications are already enabled.
X

FAME II To Be Extended Till 2024, No Additional Fund Allocation Likely

FAME II To Be Extended Till 2024, No Additional Fund Allocation Likely

The FAME II scheme was launched in 2019. It focusses on incentivising high-speed electric vehicles, charging stations and commercial electric vehicles among others

While the aim of the scheme was to support the purchase of 10 lakh electric two-wheelers, only 58,613 electric two-wheelers have been purchased so far

While the scheme is likely to get a two-year extension, there is going to be no additional allocation of funds

The Department of Heavy Industries is likely to grant a two-year extension to the Faster Adoption and Manufacturing of Strong Hybrid and Electric Vehicles scheme or FAME, according to reports. 

The union government had rolled out the policy in 2015 to encourage the adoption of electric vehicles. The FAME II scheme, launched in 2019, focusses on incentivising high-speed electric vehicles, charging stations and commercial electric vehicles among others. This is done through a certification process for vehicles. This process has impacted the electric scooter manufacturers who were part of the FAME I scheme, to a large extent incurring huge losses in the process.

The scheme which was set to expire in March 2022 is likely to be extended till 2024, according to a report by CNBC-TV18.

The report noted that officials in the government believe that the FAME scheme needs restructuring as it has been unable to generate much traction for electric vehicle demand. While the aim of the scheme was to support the purchase of 10 lakh electric two-wheelers, only 58,613 electric two-wheelers have been purchased so far. Similarly, against the aim of 5 lakh electric three-wheelers, only 15,829 electric three-wheelers have been supported so far. According to sources, only 5% or INR 500 Cr out of an allocation of INR 10,000 Cr has been spent so far.

While the scheme is likely to get a two-year extension, there is going to be no additional allocation of funds, a source was quoted as saying. The remaining funds amounting to INR 9,500 Cr will be used to support demand incentives and electric vehicle adoption under the FAME scheme till 2024, said an official requesting anonymity.

The Indian electric vehicles (EV) industry has registered a 20% surge with sales of 1.56 Lakh units in the financial year 2019-2020, compared to 1.3 Lakh in the previous year. As per the Society of Manufacturers of Electric Vehicles (SMEV), electric two-wheelers have made up for almost 97% of total sales with 1.52 Lakh units sold versus 1.26 sold in the previous year. Even the sales of electric buses have grown from 400 to 600 in FY20. Meanwhile, the sales of electric cars have slumped to 3,400 from 3,600 units sold in FY19. Meanwhile, 90K units of electric rickshaws were sold in FY2020, but the figures for the previous year are unavailable.