FAME 3 could be rolled out in 100 days of the new government

The much-awaited FAME 3 scheme that is supposed to incentive the entire ecosystem of electric vehicles will entail an allocation of about Rs 10,000 crore and could be rolled out within the first 100 days of the new government, The Economic Times has stated quoting officials who wished to remain anonymous.

The scheme FAME 2 ended in March this year. This new one will be the third phase of the FAME scheme (Faster Adoption and Manufacturing of Electric Vehicles) the blueprint of which has been designed to push the adoption of green mobility in the country which has given itself certain targets to meet.

The government has set a target that by 2030, 30% of newly registered private cars, 40% of buses, 70% of commercial cars, and 80% of 2-wheelers and 3-wheelers will be electric.

FAME 3 will offer financial incentives to electric government busses, two-wheelers and three-wheelers. However, officials told the newspaper that it is yet to be decided whether electric passenger cars, including taxi aggregators, would be declared eligible for the incentives.

“The proposed scheme mirrors the FAME 2 which lapsed in March 2024. It will be sent for approval to the Union cabinet shortly after the new government takes charge in June,” said the bureaucrat.

FAME 2 used to offer a 15% subsidy on the sale price of electric scooters. FAME 3 will take forward the Electric Mobility Promotion Scheme (EMPS). It was introduced as a stop-gap measure after the expiry of FAME 2 to continue the programme till the Lok Sabha polls end and a new administration takes over.

EMPS entails an allocation of Rs 500 crore and is designed to boost electric two-wheeler sales between April 1 and July 31.

“Since it (FAME-3) will be a new scheme, all companies seeking incentives on sale of electric vehicles would have to apply for fresh certification,” the official said.

The FAME 3 proposal is contemplating that it will be initially valid for sales over two years rather than five years as was under FAME 2.

Under FAME 2, the government had incentivised purchase of 7,000 electric buses. Under the new scheme, the number of e-busses to be purchased by State Transport Undertakings (STUs) will be raised.

However, electric passenger cars could be left out of the ambit of the scheme. The officer told the newspaper that it is being discussed whether electric cars need any subsidy in India at all.

The FAME 3 proposal under discussion suggests offering incentives for electric cars priced at less than Rs 15 lakh. FAME 2 had the same provision. Hybrid cars might also qualify for incentives under FAME 3, subject to the price cap, if passenger cars are included in the plan.

“The government is also bringing in fresh guidelines in the new scheme and companies seeking to avail benefits would have to seek re-certification,” another official said.

Incidentally, EMPS has a provision of incentive up to Rs 10,000 per electric two-wheeler and Rs 50,000 per electric three-wheeler. These are significant reductions from the Rs 22,500 for a two-wheeler and Rs 111,505 for three-wheeler as envisaged in FAME 2. Both categories get incentives of Rs 5,000 per kilowatt-hour (kWh).

EMPS is aimed at supporting sales of 372,215 EVs including electric two-wheelers (3,33,387) and three-wheelers (38,828). Incentives are being given to only vehicles fitted with advanced batteries in order to encourage the adoption of latest technology.