The Ministry of Heavy Industries and Public Enterprises has rolled out an Rs 800 crore scheme called - FAME India (Faster Adoption and Manufacturing of Electric Vehicles).
This translates to the following - subsidies for the consumer to make EV's financially attractive, help to the struggling EV manufacturers, assistance in technology development, encouraging more players to manufacture and sell EV's and support in installing charging infrastructure.
This translates to the following - subsidies for the consumer to make EV's financially attractive, help to the struggling EV manufacturers, assistance in technology development, encouraging more players to manufacture and sell EV's and support in installing charging infrastructure.
Here are the quick facts about the scheme
- An approved outlay of Rs 795 crore ($125 million USD at current exchange rates) is allocated for the FAME scheme. Rs 260 crore will be spent in FY’16 and Rs 535 crore in FY’17.
- The fund allocation for 2015-16 is distributed in the following manner. Rs 70 crore for the technology platform including testing infrastructure, Rs 155 crore for demand incentives, Rs 10 crore for charging infrastructure, Rs 20 crore for pilot projects, and Rs 5 crore for IEC operations. More details on these are given below.
- FAME India will be implemented over a 6-year period till 2020, where they will hope to sell 6-7 million xEVs annually.
- Scheme is applicable to all major metro cities, all state capitals and other urban cities with 1 million population.
For the Consumers
- Upto Rs 22,000 subsidy for electric scooters/e-bikes.
The tables below show how the subsidy amount will be decided based on the vehicle type, levels etc.
- Upto Rs 29,000 subsidy for electric scooters/e-bikes.
We have not seen an electric motorcycle product yet here in India, but this could tempt major players to enter the market. - Upto Rs 124,000 for sub meter 4 wheelers.
The Mahindra e2o electric car should fall under this category
- Upto Rs 138,000 for four-wheelers above 4 metres long
Future electric sedans like the Mahindra Verito electric will fall under this category. - Vehicles under the scheme have been broadly categorised based on two types of battery technologies
‘Conventional Battery’ and ‘Advance Battery’.
‘Conventional Battery’ represents the batteries with Lead as the principal chemical Element.
‘Advance Battery’ represents the new generation batteries without Lead such as Lithium polymer, Lithium Iron phosphate, Nickel Metal Hydride, Zinc Air, Sodium Air, Nickel Zinc, Lithium Air etc.
The subsidy amounts are categorised based on the battery type and also if the vehicle is a hybrid or a pure electric or a level 1 or a level 2 type of vehicle. Level 2 vehicles offer with higher fuel savings potential (for example - bikes with Lithium Ion battery tech will come into level 2 as they last longer and save more fuel)
Source - Department of Heavy Industry
- These tables shows the subsidy amounts for hybrids, pure battery operated vehicles across various two and four wheeler levels.
- Hybrid vehicles get less subsidy and pure battery operated vehicles with 0 local emissions to get more subsidy.
Exactly the way it needs to be.
- Consumers can avail the discounted price immediately at the dealer level, as the government reimburses the auto companies every month. This will also lead to faster adoption.
Photos of hybrid and pure electric vehicles displayed when the FAME announcement was made in Delhi
Where is the money going?
The four thrust areas of the scheme are:
The four thrust areas of the scheme are:
- Demand and supply creation
Demand creation basically ensures direct incentives to the consumer. On the supply side, they are going to provide money for technology development to component manufacturers. This will ensure local manufacturers develop components and thus the EV industry need not rely on imports. - Technology development
There are multiple research groups, doing battery research, motor and controller research etc. A part of FAME will support these groups. - Charging infrastructure
Private parties will be invited to setup charging points for EVs. Money will go here to actually create electric highways and charging points in and around cities. - Pilot projects
These are startup tester projects that will be initiated by the government or government agencies or private companies. Some examples are - Cab Fleet companies, Short distance cargo haul, Public transport companies interested in hybrid and electric buses etc.
Photos - Mr Jaspreet Singh of MREV
What the industry is saying?
- "FAME is a great imitative and glad to see it come through. It's going to give India the right impetus to go electric" - Mr Chetan Maini, Founder of Mahindra Reva Electric
- "This a giant step toward cleaner mobility. This is a new generation technology, which India has started late and with this we are going to make a beginning." Vishnu Mathur, Director General, Society of Indian Automobile Manufacturers (SIAM)
- "This indicates the sort of confidence that the govt has in this sector and its willingness to do its part to kick-start it in India. Subsidy of 10-25K for e-bikes will go a long way in getting sensible and good electric vehicles on the road - ones which are not a compromise. Exciting times ahead." - Tarun Mehta, co-founder and CEO of Ather Energy
- "We are thankful to the government in extending the benefit to EV’s. The scope is larger though still lacks execution clarity and streamline would take some time. Its a positive move but actual execution in terms of infrastructure would be the game changer for the industry. Also the amount in terms of incentive is highly skewed towards 2 wheelers & Heavy Commercial vehicles" - Anonymous electric vehicle manufacturer
- "The whole program is very well planned and well thought out. The plans are tested every year before putting the money out for the next year. This will ensure the money is well spent. Its a great way to start and will help them understand how the money needs to be spent and what areas they need to focus on." - Rajit Arya, CEO of Morello Yamasaki
- "It’s is a very good initiative and the subsidies for the consumer is good. Now it is upto the OEMs to come up with good products and make use of these incentives in a productive manner which encourages people to go for an electric vehicle" - Priyank Dahanukar, CEO of Electric Vehicle India
Final Words
“Keeping in view the limited domestic reserves of conventional fuels and the rising demand in the automobile sector, it is a dire necessity to find alternate sources of energy for transport which are eco-friendly yet cost-effective. In the present circumstances, FAME is a necessity", said Mr Anant Geete, minister of Heavy Industries and Public Enterprises.
The minister called upon both the industry and academia in the country to come forward and develop new and advanced electric and hybrid vehicle models across all segments matching international standards which are also cost effective.
Now this is the kind of support we have always wanted form the government!
We @ PluginIndia are very confident that investment will start pouring into the EV segment, consumers will have more choices in the coming years and we can hope to breathe clean air in our cities.
“Keeping in view the limited domestic reserves of conventional fuels and the rising demand in the automobile sector, it is a dire necessity to find alternate sources of energy for transport which are eco-friendly yet cost-effective. In the present circumstances, FAME is a necessity", said Mr Anant Geete, minister of Heavy Industries and Public Enterprises.
The minister called upon both the industry and academia in the country to come forward and develop new and advanced electric and hybrid vehicle models across all segments matching international standards which are also cost effective.
Now this is the kind of support we have always wanted form the government!
We @ PluginIndia are very confident that investment will start pouring into the EV segment, consumers will have more choices in the coming years and we can hope to breathe clean air in our cities.