The Department of Heavy Industries announced the extension of the government’s flagship electric vehicles promotion scheme by a period of two years. It will now be valid till March 2024.
The Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME-II) scheme, which has a financial outlay of Rs 10,000 crore to promote EVs by extending buyer subsidies, was first announced as a three-year program effective from April 2019. There was no change mentioned in the financial allocation to the scheme.
The project has fallen behind its targets and only a fraction of the intended number of EVs have been sold under the program so far. The target was to sell 1 million electric two-wheelers, 500,000 three-wheelers, 55,000 cars and 7,000 buses. But only 78,000 EVs in total have been sold under the scheme so far.
Sohinder Gill, director-general of EV industry lobby Society of Manufacturers of Electric Vehicles said – “This will allow the EV industry more time to extend the benefits to customers. In the last few months, we have seen many measures announced by Central and State governments, which have brought positive sentiments in the industry. The industry is prepared for a major transformation and we will see EVs occupying major space in the county in the next five years.”
In a recent move, the department had increased the subsidy given per electric two-wheeler, which is linked to the battery size, from Rs 10,000 per kilowatt hour to Rs 15,000 in a bid to speed up the take of EVs in India. Also, the cap on maximum available subsidy has been raised from 20% of the price of the vehicle to 40%.