It is anticipated that FAME III, the third iteration of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) policy, will go into effect in July. It will allow EV manufacturers to streamline their manufacturing and logistics to a point where they will no longer have to rely on subsidies to make their vehicles affordable for the masses. Let us Understand it in a better way:
Continued Incentives for Smaller EVs
Smaller EVs, such as electric two- and three-wheelers, will still be eligible for the same subsidies under FAME III. Three-wheelers and electric scooters that were subsidized by FAME II are included in this list of incentives. The government provided incentives of up to Rs 22,500 for electric two-wheelers and up to Rs 1,11,505 for electric three-wheelers. It is expected that incentives for electric buses will not end.
Absence of Electric Vehicle Incentives?
Electric vehicles may not be covered under the new FAME policy for both personal and business use. Private electric vehicles were not covered under FAME II, although electric cars under Rs 15 lakh were subsidized. The new regulations would likely prioritize powerful hybrid vehicles over electric vehicles.
Choosing Hybrids Over EVs
In India, the popularity of hybrid cars strong hybrids has been growing without official government backing. Strong hybrid vehicles may qualify for incentives under the new FAME program if their annual cost is less than the Rs 15 lakh allotted for EVs under FAME I. This could open the door for automakers to produce powerful hybrid vehicles at lower costs so consumers can take advantage of the incentives.
The FAME Journey
The FAME 2 subsidy program ran from April 2019 until March 2024. It aimed at assisting in subsidizing EVs, and the government set aside Rs 10,000 crore. It was reported that For electric two-wheelers to be eligible for subsidies, they have to fulfill specific requirements, and Up to 40% of the vehicle's total ex-factory cost, the national government-subsidized Rs 15,000 per kWh of battery capacity. A later reduction in the subsidy to Rs 10,000 per kWh and 15% of the ex-factory price occurred.
Prospects for the Future
FAME 3 will take effect in September 2024, approximately 100 days after the results of the general election, when the new administration is formed. Although the qualifying requirements are still being worked out, FAME 2's requirements are said to remain the same. The allotment of Rs 10,000 crore is also the same as it was in the previous FAME edition. When comparing the cost of electric bikes and scooters to that of EMPS, this should most likely result in lower prices. Manufacturers would have to reapply for certification, though, if they wanted to receive subsidies under FAME 3. It has been confirmed that FAME 3 will apply to sales made for a period of two years, as opposed to five years as under FAME 2.
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