Government Policy Towards Electric Vehicles in India: FAME India Scheme
The Government has set the ball rolling for the electric future of India through policy-adoption and scheme-implementation. The article breaks down the National Electric Mobility Mission, the FAME India Scheme and other schemes launched by the State Governments, to understand the present Government policy towards electric vehicles.
The Government of India has been actively pushing for low carbon-emission alternatives in the automobile industry by laying down a framework and introducing policies that encourage electric vehicles (EVs) in India. The increasing number of electric vehicle launches by automobile manufacturers and the upcoming Tesla factory in Karnataka reflect the steady progress that Indian electric vehicle industry has made ever since the implementation of these policies. There is a cluster of government agencies involved in the policy making for electric vehicles, some of the most important of them are:
- Ministry of Power
- Ministry of Road Transport and Highways (MoRTH)
- Bureau of Energy Efficiency (BEE)
- Ministry of Housing and Urban Affairs (MoHUA)
- Department of Heavy Industry (under the Ministry of Heavy Industries and Public Enterprises)
- National Automotive Board (NAB)
Through these agencies, the Government has come up with many plans and schemes for the smooth implementation of its policies and achieving its ambitions of developing India’s automobile future. Some of them are:
- National Mission on Electric Mobility, 2011
- National Electric Mobility Mission Plan 2020
- Scheme for Faster Adoption and Manufacturing of (Hybrid and Electric) Vehicles in India (FAME) Phase I
- Scheme for Faster Adoption and Manufacturing of (Hybrid and Electric) Vehicles in India Phase II (FAME India Phase II)
National Electric Mobility Mission Plan 2020 and FAME India Scheme
- The National Electric Mobility Mission Plan 2020 was launched with the aim of providing the vision and blueprint for faster adoption of electric vehicles in India.
- It further aimed at speeding up the manufacturing capacity of the nation.
- It was based on the following three prongs:
- Enhance fuel security of the nation
- Providing transportation which is affordable and environment friendly
- Transform India into a manufacturing leader, thereby transforming the Indian automotive industry
- Under this plan, in 2015, the Department of Heavy Industry formulated the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme.
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme
- With the FAME India Scheme, the Government aims to promote manufacturing of electric vehicle and hybrid vehicle technology while sustaining their growth.
- Under Phase I of the scheme, the Government had set a target of achieving 6 to 7 million sales of hybrid and electric vehicles by 2020.
FAME India Scheme Phase I
- The FAME India scheme was launched by the Ministry of Heavy Industries and Public Enterprises in 2015.
- Its purpose was to “incentivize the production and promotion of eco-friendly vehicles including electric vehicles and hybrid vehicles”.
- It was concluded on 31st March, 2019 and from 1st April, 2019, Phase II of the Fame India Scheme was started.
FAME India Scheme Phase II
- FAME India Scheme Phase II was launched as an expanded version of its Phase I counterpart.
- It started from 1st April, 2019, with a three-year plan of continuing upto 31st March 2022.
- Its purpose it to provide a push electric vehicles in public transport and encourage their adoption through market creation and demand aggregation.
- It is developed with a holistic approach directed towards creating charging infrastructure, research and development of EV technologies and indigenization of the industry.
- It also provides for setting up charging stations for electric vehicles, starting with Tier-1 cities, and expressways and highways that form busier corridors.
- It has an outlay of INR 10,000 for the three years upto 2022.
- With a special focus on public transportation, the Government is offering incentives for three-wheeler and four-wheeler vehicles to be used for commercial purposes, and electric buses.
- The scheme also covers hybrid vehicles and vehicles with sizeable lithium-ion battery and electric motor.
- There is room for centre-state collaboration as the scheme allows the states to implement their own policies and subsidize purchases at their own level.
- It offers incentives to manufacturers investing in developing electric vehicles and their components, lithium-ion batteries, and electric motors.
Who does the incentives apply to?
- buses priced up to INR 2 crore
- strong and plug-in hybrids below INR 15 lakh
- three-wheeler vehicles under INR 5 lakh
- two-wheeler vehicles under INR 1.5 lakh
- Incentive scheme of INR 10,000 per kilowatt for two-wheelers, three-wheelers and four-wheeler, depending on the size of the vehicle’s battery.
- Incentive scheme of INR 20,000 per kilowatt is offered to state transport units for electric buses. The incentive is offered on the basis of operational expenditure by the state transport units.
- These incentives are reviewed after a certain period by a committee constitutes for this purpose.
Impact on Charging Infrastructure
- The scheme aims to bring together the public and private sector to participate in setting up of charging stations.
- It proposes to set-up at least one slow-charging unit for every electric bus and at least one fast-charging station for every 10 buses.
- The scheme aims at interlinking renewable energy sources with charging infrastructure.
July 21, 2021