How The New FAME Subsidy Programme Will Impact The EV Industry
The National Electric Mobility Mission's FAME or Faster Adoption and Manufacture of Electric Vehicles Subsidies, programme was introduced in April 2015. The subsidy aims to encourage the purchase of electric and hybrid vehicles by facilitating financial back. Its first phase ran for four years till 2019. FAME II or the second phase of the mission is a three-year subsidy programme that targets keeping up the electrification of public and other shared transportation. This also assists in financing the charging points as well as infrastructure. There will be 532 charging stations deployed overall through July 2022.
The objective of FAME II is to narrow the gap between the prices of traditional internal combustion vehicles and electric vehicles such as cars, scooters, three-wheelers, and hybrids also. This programme was introduced in April 2019 with the goal to motivate the switch towards electric mobility, reduce carbon emissions and save fuel. The Government has allotted Rs. 10,000 crore to achieve this with a target to subsidise 5,00,000 EV 3W and 55,000 EV4W.
The FAME subsidy will have a strong impact on the EV Industry in the coming future and it seems to be optimistic. An increase in subsidy will narrow the price gap for electric vehicles even further when compared to the petrol variant. If you are in a position where subsidies are available, the decision to buy an electric vehicle may get even simpler. Presently, less than 1 per cent of total vehicle sales in India are electric, and with Central Government’s FAME II, State Government pitch; the hope is to bring a difference in this statistic in upcoming years. The Central Government has extended the FAME Scheme till March 2024.
The Central Government has set a target for 30 per cent of all passenger vehicles to be electric by 2030. Utmost efforts are being made for a brighter future like manufacturing, setting up charging infrastructure with a vision of reducing dependency on fossil fuels, and lowering carbon emissions. This scheme will aid in progressing towards sustainable mobility solutions which is evident by the increased number of electric vehicles being sold after June 2021 and most of the chunk came from electric scooters. The EV industry sees it as progress in the right direction. The adoption of EVs and improved technology will make them more affordable and efficient.
FAME II brings benefits for both manufacturers and customers. It provides direct financial assistance to EV manufacturers and customers as they get EVs at a reduced cost, thus making them more cost-effective. Original Equipment Manufacturers can claim a subsidy from the Department of Heavy Industries. Faster Adoption and Manufacturing of Electric Vehicles (FAME) II has a broader perspective such as demand incentives which will be followed by developing a charging station network. The Indian EV industry and the general public will be able to avail numerous ecological benefits.
FAME II will develop an ecosystem of investment which means it will allow industry players to invest in the journey of sustainability and this leading to the availability of EVs in the local markets. It will help in bringing new inventions, technologies, types of equipment, and advancements to the Indian EV Industry which is ultimately advantageous for the economy. The Electric Vehicle has employment potential so it will serve one more aspect which is employment opportunities. The FAME II is expected to bring new hopes and prospects to the Electric Vehicle segment.
FAME II will have a positive impact on the electric vehicle industry. It will bring new opportunities for manufacturers to flourish while assuring quality EVs at reasonable prices for the end customer.
