FAME-III subsidy: What to expect, how it benefits consumers

FAME-III to launch soon: The automobile industry has undergone technological advancements along with more cleaner and sustainable fuel options coming into the picture. The focus on electrification of vehicles has seen a rapid pace with governmental incentives such as FAME subsidies, EMPS schemes, etc. FAME stands for the Faster Adoption and Manufacturing of Electric (and Hybrid) Vehicles. FAME along with the Electric Mobility Promotion Scheme (EMPS) helps consumers purchase electric vehicles at an affordable price, which in turn will lead to the faster adoption of electric two-wheelers and three-wheelers.

When will FAME-III be launched?

The government is expected to finalise the third edition of the subsidies for hybrid and electric vehicles (EVs) in India under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) within the next two months. At the ASSOCHAM’s National Conference on Electric Mobility, HD Kumaraswamy, Minister of Heavy Industries mentioned the upcoming FAME-III scheme. The planned FAME 3 will replace the temporary Electric Mobility Promotion Scheme (EMPS) 2024. The EMPS scheme will expire in September 2024.

Also, read FAME-III subsidies to be announced within next two months 

What is FAME subsidy?

The FAME subsidy was first introduced in 2015 and had a total fund allocation of Rs 795 crore. Then in 2019, the second phase of the FAME subsidy was approved by the cabinet. At the time, the FAME-II subsidy had a budget of Rs 10,000 crores for three years which got extended with an additional cost of Rs 1,500 crores. Now, the government is expected to finalise the third edition of the subsidies for hybrid and electric vehicles (EVs) in India.

FAME-II scheme:

The FAME-II scheme was introduced in 2019 with a total budget allocation of Rs 10,000 crore over three years from 2019-20 to 2021-22. The main emphasis of the FAME-II scheme was on the electrification of public transportation which includes shared transport.  There are incentives for the vehicles used for public transport or registered for commercial purposes in the three-wheeler and four-wheeler segments. To encourage advancement in technologies, the benefits of incentives will be extended to only those vehicles that are fitted with advanced batteries like a Lithium Ion battery and other new technology batteries.

FAME-I scheme:

The FAME-I scheme was first introduced by the Ministry of Heavy Industries in 2015. It had a total fund allocation of Rs 795 crore.  The Ministry of Heavy Industries had sanctioned 520 Charging Stations/Infrastructure under the Phase-I of FAME India Scheme. Further, this Ministry has also sanctioned 2,877 Electric Vehicle Charging Stations in 68 cities across 25 States/UTs and 1576 charging stations across 9 Expressways and 16 Highways under Phase II of the FAME India scheme. The FAME-I scheme lasted from 2015 to 2019.

FAME subsidy focus areas:

The FAME scheme had several focus areas, which included public charging infrastructure, the creation of demand through incentives, and the development of technology.  

Public charging infrastructure: The FAME scheme provides grants for projects related to public charging infrastructure, including charging stations in metros, smart cities, and hilly states. 

Creation of demand among customers: The scheme aims to create a market demand for electric and hybrid vehicles through incentives given by the manufacturer.

Technology development: The scheme focused on in-house development of different technologies, such as battery technology, battery-management systems, battery recycling, etc.