After increasing total subsidy funds under FAME 2, government has revealed complete details of subsidy that will be available for e-vehicles. As per a new government notification, subsidy on e-cars will now apply to consumers electric vehicles as well, in addition to public transport vehicles. Subsidy on consumer electric vehicles will be available for various types of vehicles such as two-wheelers, three-wheelers and cars.
As per details provided in the new notification on FAME 2 scheme, subsidy on electric vehicles will be available over the next three years. Subsidy program will cover 10 lakh electric two-wheelers, 5 lakh electric three-wheelers, 35,000 electric cars and 7,090 electric buses. A provision for 20,000 full-hybrid vehicles has also been included, which will be eligible for subsidy under FAME 2 scheme.
For electric two-wheelers below Rs 1.5 lakh, applicable subsidy will be Rs 20,000 per vehicle. This can be claimed by the manufacturer and transferred to the customer. In case of electric three-wheelers costing up to Rs 5 lakh, subsidy amount will be up to Rs 50,000. Subsidy of up to Rs 1.5 lakh will be available on electric cars that are priced up to Rs 15 lakh.
However, subsidies in case of electric 4-wheelers will be available only for Indian made electric vehicles. If we look at electric 4-wheeler manufacturing capability in India, it’s evident that only Tata Motors, Maruti Suzuki and Mahindra Electric have the capability to produce electric 4-wheelers that are priced below Rs 15 lakh in the next three years.
Government has done well to launch a long-term program to promote the sale of electric vehicles in the country. FAME 2 policy will be useful in promoting domestic technology and manufacturing capabilities in addition to the primary goal of reducing emissions. FAME 2 will also boost investments in electric vehicle ecosystem that comprises various stakeholders such as OEMs, suppliers, and mobility service providers.
The idea here is to boost overall sales of electric vehicles, which currently comprise of about 1% of the total vehicle sales in the country, to comprise of 40% of total sales by 2030. This will not only help reduce pollution, but will also boost a new economy. Major car and bike makers in India have already started work towards launching made in India electric vehicles. Mahindra already has e2O and eVerito on sale, Maruti will launch WagonR electric, Tata already has the Tiago, Tigor, Altroz electric in pipeline, Honda is testing Jazz electric, Hyundai has announced plans to launch Kona electric, and so on.