FAME 2 EV subsidy of INR 5,294 Cr disbursed for 11,79,669 units sold by Dec 11, 2023

The Ministry of Heavy Industries (MHI) introduced the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) Scheme, a five-year initiative starting from April 1, 2019, with a total budgetary allocation of Rs. 10,000 crore. As per the official statement, the primary focus of this phase is to support the electrification of public and shared transportation. The scheme aims to provide demand incentives for 7,090 electric buses, 5 lakh electric three-wheelers, 55,000 electric four-wheeler passenger cars, and 10 lakh electric two-wheelers. Additionally, the creation of charging infrastructure is a supported component.

As of December 11, 2023, under Phase II of the FAME India Scheme, electric vehicle manufacturers have received a subsidy totaling INR 5294 crore for the sale of 11,79,669  electric vehicles. The breakdown of the sold electric vehicles includes 10,42,110 two-wheelers, 1,22,690 three-wheelers, and 14,869 four-wheelers (as per http://fame2.heavyindustries.gov.in/dashboard.aspx).

Furthermore, the MHI has sanctioned 6,862 electric buses for various entities involved in intracity operations. Out of these, 3,487 electric buses have been supplied to State Transport Undertakings (STUs) as of November 29, 2023.

In addition, the Ministry has granted INR 800 crore as capital subsidy to three Oil Marketing Companies (OMCs) under the Ministry of Petroleum and Natural Gas (MoPNG) for the establishment of 7,432 electric vehicle public charging stations.

It is important to note that under FAME-India Scheme Phase II, no incentives are directly provided to electric vehicle manufacturers. Instead, incentives are given to consumers in the form of reduced upfront purchase prices for hybrid and electric vehicles. This reduction is later reimbursed to the Original Equipment Manufacturers (OEMs) by the Government of India. As of November 29, 2023, a total of 62 OEMs have registered to avail demand incentives, with claims submitted amounting to Rs. 5,094 crore. Of this, Rs. 3,815 crore has already been disbursed.

The Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry, allocated a budget of INR 25,938 crore, aims to offer financial incentives to encourage the growth of domestic manufacturing in the Advanced Automotive Technology sector. This includes electric vehicles and their components. Under the scheme, eligible sales of electric vehicles and their components can receive incentives of up to 18%.

Moreover, FAME India Scheme Phase II does not include provisions for the manufacturing capacity of advanced chemistry cells. To address this, the government approved the Production Linked Incentive (PLI) Scheme for ‘Advanced Chemistry Cell (ACC) Battery Storage’ for achieving manufacturing capacity of 50 GWh on May 12, 2021, with a budgetary outlay of INR 18,100 crore. This scheme also covers 5 GWh of niche ACC technologies.

To ensure compliance with FAME guidelines, a monitoring mechanism has been established, including the formulation of compliances and vehicle testing through Testing Agencies  i.e adoption of Phased Manufacturing Programme and conditions to avail Demand Incentives. An Inter-Ministerial Empowered Committee called the “Project Implementation and Sanctioning Committee (PISC),” headed by the Secretary (Heavy Industry), has been constituted for the overall monitoring, sanctioning, and implementation of the scheme. This information was provided by the Minister of State for Heavy Industries, Shri Krishan Pal Gurjar, in a written reply in Lok Sabha on December 5, 2023.

Link to the Press release of Ministry of Heavy Industries(MHI).

Also read: MHI to conduct re-building for remaining 20 GWh cell manufacturing under PLI