FAME-III: Govt Plans INR 40K-50K Cr Outlay To Promote EVs

Amid the ongoing issues with the FAME-II scheme, the government has reportedly prepared the first draft of FAME-III, which has proposed an outlay of INR 40,000-50,000 Cr to promote electric vehicles (EVs) in the country.

The government held inter-ministerial discussions as well as consultations with the industry before outlining INR 40,000-50,000 Cr outlay, CNBC reported.

In addition to electric two-wheelers, three-wheelers, cars and buses, the government also plans to support electric trucks, electric cycles and quadracycles under FAME-III. It can also make a substantial allocation to support electric buses and charging infrastructure.

The draft proposals for the FAME-III scheme have to be examined and approved by the Finance Ministry and the Prime Minister’s Office. While the report didn’t specify the name of the ministry which has prepared the FAME-III draft, it is likely to be the Ministry of Heavy Industries which was also responsible for the earlier two versions of the scheme.

The government is contemplating both demand and supply incentives for supporting EVs, and is working on two to three models to support the EV industry over five years, the report said.

The FAME India scheme, introduced in 2015, was an initiative to boost the overall EV adoption in the country. Initially launched for a period of two years, commencing April 1, 2015, the phase-I of FAME was extended multiple times. The last extension was allowed till March 31, 2019.

FAME-II scheme was launched in 2019 with a total outlay of INR 10,000 Cr.

However, multiple two-wheeler electric original equipment manufacturers (OEMs) were probed by the government over the last year or so for claiming subsidies under FAME-II despite violating the norms.

The government also directed Ola Electric, Ather Energy, TVS Motor, and Hero MotoCorp to refund an amount of INR 288 Cr back to their customers for overcharging time by billing them separately for charger and software.

This controversy has also impacted the sales of electric two-wheelers in the country. Although total EV registrations in the two-wheeler category rose to 54,232 units in July from 45,991 units in June, as per Vahan data on August 1, the number of registrations in July was lower than in each of the months during the January-May 2023 period.