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Electric cars to get subsidy of up to Rs 2.5 L – Govt approves phase 2 of FAME

With a Government of India plan to boost use of electric vehicles, a proposal was put before the Cabinet on February 28 – as a part of the Faster Adoption and Manufacturing of (Hybrid and Electric Vehicles) India (FAME) II scheme. As expected by many, the scheme was officially approved by the govt, giving a huge boost to the electric vehicle industry in India.

The government wants to see fast results on the electric vehicles front, therefore, it has doubled allocation to the scheme to Rs.10,000 crores from the earlier Rs 5,500 crore. As per the scheme, a total of 55,000 electric cars will be offered a subsidy of up to Rs 2.5 lakhs; 20,000 hybrid cars will be offered subsidy of Rs 20k. Under the scheme, subsidy will also be offered to 10 lakh two wheelers, 5 lakh three wheelers and 7,000 buses.

Maruti WagonR electric on test in India

However, it may be noted that this subsidy for electric cars are exclusive for passenger electric cars available only to taxi aggregators and there will be no subsidy on electric cars for private use.

Scheduled to come into effect from 1st April 2019, the scheme will also cap ex-factory price of the vehicles so as to avail of the subsidy of Rs.15 lakhs. This subsidy will be calculated on the basis of battery capacity which will be Rs.10,000 per kWh for all vehicles and at Rs.20,000 per kWh for buses. In terms of electric cars, the Mahindra eVerito could get a subsidy of around Rs.1.5 lakhs while electric two wheelers will be offered with subsidy of Rs. 40,000. The Government subsidy on electric buses could go up to Rs. 60 lakhs. These subsidies will go a long way in making electric vehicles more attractive to buyers as compared to their petrol counterparts.

Mahindra has promised to launch electric XUV300 in 2020.

Mahindra is one of the leading OEMs in the electric vehicle industry. On the approval of FAME 2 phase, Dr. Pawan Goenka, MD, Mahindra, said, :We applaud the approval of FAME II scheme by the Union Cabinet. The new outlay of Rs 10,000 crore over a period of three years provides a stable policy to promote green mobility in India. It addresses the key issues including National Energy Security, Mitigation of the adverse impact of vehicles on the environment and Growth of domestic technology and manufacturing capabilities.

The revised FAME II removes all the uncertainty and will put Electric Vehicles in the fast lane. Mahindra supports the Central Government’s focus to boost EVs in public transportation and now requests local authorities to help facilitate plying of electric vehicles on Indian roads. Government support with the FAME II scheme is holistic and includes focus on charging Infrastructure with a clear emphasis on “Make in India”. We feel that it is now the responsibility of suppliers, OEMs and mobility service providers to invest in EVs and make India’s EV dream become a reality.”

Apart from offering attractive subsidies on electric vehicles, the Government of India is also paying more emphasis to charging infrastructure both within city limits and along the highway. Developing of capacities and enhancing production of lithium ion batteries for these vehicles will also be another area of focus. These initiatives are being taken by the Government of India with a target to enhance share of electric vehicles from a current 1 percent to 40 percent by 2030. The FAME II scheme will also offer a host of incentives such as exemption from paying road tax, registration fees and parking charges for both electric and hybrid vehicles.

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