Driving Towards a Greener Future: The Impact of India's FAME II Scheme on Electric Vehicle Adoption

FAME II, the Faster Adoption and Manufacturing of Electric Vehicles in India Scheme (FAME India Scheme), is being implemented for a five-year time horizon with a total budgetary support of Rs. 10,000 crores. The program is designed to boost the uptake of electric buses and other shared / public modes of transportation, to support 7090 e-Buses, 5 lakh E-3 Wheelers, 55000 e4 Wheeler Passenger Cars, and 10 lakh E2 Wheelers. The previous administration also planned to have as many as 2700 charging stations across the country. FAME 2 subsidy came into being in April last year and has only seen the narrowing of the gap between the prices of traditional internal combustion (petrol, diesel) vehicles and electric vehicles. The initial subsidy covered any electric scooters and bikes whose range had to be at least 80 km and whose max speed reached 40 km/h. Nevertheless, this has gone to reduce the number significantly which was not in the range of electric two-wheelers. The government turned to revise subsidies in June of 2021, in a move to increase the amount of new EVs on the road as of then, in which the rate of adoption was fairly low.

What was FAME originally derived from?

The quicker adaptation and manufacture of (hybrid and) electric vehicles in India (the second phase of the FAME India scheme) is being implemented by the Ministry of Heavy Industries and it lasts for a period of five years starting from 1st April 2019 with a total financial support of US$ 410 million.10,000 crore. As the name says, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme was introduced by the Government of India to speed up the production of electric vehicles. This will be crucial to the ongoing undertaking to mitigate the effects of climate change all over the world.

This phase mainly focuses on supporting the electrification of public & shared transportation and aims to support through demand incentive 7090 buses, 5 lakhs e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars, and 10 lakhs e-2 Wheelers.

Ministry of the Heavy Industry has provided sanction for charging station/ infrastructure barring 520 units in phase-I of the scheme under FAME India. It is pertinent to mention that this Ministry also sanctioned 2,877 Electric Vehicle Charging Stations spread across 68 cities of 25 States/UTs under Phase II of the FAME India Scheme. The Ministry has also sanctioned 1576 charging stations for expressways and 16 highways under Phase II of the FAME India Scheme.

As per the precedence, increasing pollution from diesel and petrol vehicles has been a constant problem; the Government of India has been adopting measures towards the purchase and use of electric vehicles to overcome this problem. One of the important moves taken was the launch of the FAME subsidy in the first phase, which will continue the second edition, which is called FAME 2. Initially, it was planned in a scheme that was to end on 31st March 2022, but the government has considered a 2-year extension, and hence the scheme will end on 31st March 2024.

In the past ten years, car emissions pollution has been on a growing trend. To prevent the same, the National Government of India recently came up with phase one of its Fame India Project in 2015 which includes measures to lessen the pollution produced by diesel and petrol-powered vehicles and encourages the use of electric/hybrid vehicles in the country. The promoting factor comes in the form of subsidies that are renewably gifted to electric vehicle manufacturers and sector providers. The central government brought the National Electric Mobility Mission Plan which constitutes the Fame India program under the Ministry of Heavy Industries and Public Enterprises.

Phase I: The Fame India Scheme’s first phase began in 2015 and ran through March 31, 2019.

Phase II: This program’s second phase began in April 2019 and will go on until the end of March 2024.

Phase I:

The initial implementation of the FAME scheme started in April 2015 and was valid for a policymaking period of two years that came to an end on March 31st, 2017. Later, its operation was modified as a result, and it was extended through March 31, 2019. This was the country’s pioneer policy to develop a green automotive industry and initiate the use of eco-friendly vehicles. Only 529 crore had been deployed from the total INR 795 crore allotted for the demand generation incentives, technological platforms, pilot projects, and charging infrastructure. It created an attractive setting of INR 343 crore for a 4-year program, which involved 2.78 lakh EVs and 465 e-buses to different states.

All EV categories are entitled to purchase subsidies under FAME I policy’s Phase-1 irrespective of their category i.e. e-2W, e-3W, personal e-4W, LCV, and e-buses. By and large, the FAME I primarily focused on the technical, pilot projects, and initial incentives for electric and hybrid cars. Through emphasizing the four key areas, the authorities that were responsible for this had the first phase. Demand generation, technology platforms, pilot projects, and charging capabilities come next.

Phase II:

FAME II is a different thing, and it is more of a complex approach than it is a straightforward strategy. This complex strategy emphasizes a lot on consumer subsidies, the creation of charging infrastructure, and the promotion of electric public transportation. FAME II is the new step for India to fulfill their goal of fast speeding up electric mobility and reducing emissions.

Some basic objectives include:

• Emphasis on E-Mobility: The Indian government intends to achieve tremendous growth in the electrification of vehicles and therefore under the second phase of the FAME scheme (FAME II) the emphasis is laid on electric mobility.

• Consumer incentives: It indeed directly gives discounts and savings to people who buy electric vehicles. These packages of financial aid are mostly allotted for the purchase of electric two-, three---, and four-wheel vehicles. Among the diverse changes, FAME II may be considered the toughest with the higher qualifying criteria and a greater subsidy ceiling compared to that of FAME I.

• Charging Infrastructure: While FAME II focuses on building a widespread charging network and cities with populations higher than a million residents, its major concern is to improve connectivity. It is expected that 2700 charging stations will be installed in metropolitan areas, smart cities, hilly areas, and populated cities above a million inhabitants through the second phase of the Fame India Programme. War shall be made at 3 × 3 km on a grid. The government intends to install charging stations along both sides of the road with a distance of 25 km between adjacent stations if it is on the highways and if it is on the road.

• E-Buses: It recommends governments use electric buses in transport fleets and expand electric mobility across different industries.

• Local Manufacturing: FAME II, we encourage domestic manufacture of EV parts, including, but not limited to, lithium-ion batteries and power electronics so that we cut down on imports and promote the regional EV expansion.

• Promotion of Electrified Public Transportation: The program envisions adding electric buses and three-wheelers to the public transport sector as part of its e-mobility strategy.

Is the subsidy for Electric Vehicles FAME II on the same line of design?

FAME or Faster Adaption and Manufacturing of Electric Vehicles was an initiative undertaken by the Indian authorities to achieve the target of price parity with traditional Internal combustion engine vehicles i.e. petrol and diesel cars, scooters, and three-wheelers were taken into consideration. In April 2019, the scheme was introduced by the government to the public as a means to promote the use of electric transport with a firm conviction that this will help reduce carbon emissions as the nation strives to achieve greenhouse gas emission reduction in line with COP 21 conference and also save on fuel. The first FAME II incentive was reserved for electric scooters and bikes having a minimum range of 80km under the Indian Driving Cycle and a minimum speed of 40 km/h respectively, the TVS iQube range and speed are better than theirs, and their list of more other criteria like battery chemistry, localized production, etc., that are followed by the TVS iQube. Nonetheless, we emphasize here the point that this format disqualifies many of the e-bikes present in the market, the majority of which are in the low-speed category. The starting subset is set to 20% of the cost of the vehicle and is limited to ₹20,000 per kWh. A month later, in June 2021, the authorities turned the screw and revised the subsidies to bolster the increase of EV uptake, which was low before.

FAME 2 Subsidy on Electric Scooter:

The next stage of the subsidy will be Phase II, which is going to provide similar support for 1 million electric two-wheelers during the term of the subsidy. For registered vehicles in that number, there will be a subsidy of Rs. This would not have been possible through the government budget without the contribution of 20,000 each from the government. If you are applying for the last phase of the scheme, you need to know that only these two-wheelers that have a range of 80 km after charging and get a speed of at least 40 km/hr are entitled to the scheme.

Subsidy will be offered to the buyers in promoting the purchase as an incentive. Moreover, the end goal is to supply 2700 charging stations throughout the country. Place of the apple will be such as metro stations, hills, and smart cities, it will be on the way even on the highways.

FAME 2 Subsidy Eligibility Criteria:

To be eligible under FAME 2, one must be an individual who meets the following conditions:

• Everything is needed to identify the person by his/her ID.

• The claimant should not have had the FAME 2 subsidy for electric two-wheelers in the past.

• Registered name, as the proof of identification must be identical to the name mentioned over the ID proof.

The FAME 2 increment amount for the initial period is Rs. One rupee is added to the price per kWh which later on rose to Rs. 8 ¢ per kWh, subject to a ceiling of 40% of the vehicle's total cost. Somehow, the governing body has once again made the cuts. The recent announcement of the reduction of the upper cap by the Income Tax Department has brought the maximum subsidy amount to 15% of the cost of an electric vehicle starting from 1st June 2023 onwards.

List of companies (OEM) approved for subsidy under FAME 2

• Tata Motors Passenger Vehicles Limited (formerly known as Tata Motors Limited)

• Kinetic Green Energy & Power Solutions Ltd

• Ather Energy Pvt. Ltd.

• Jitendra New Ev Tech Pvt. Ltd.

• champion polyp last

• Mahindra & Mahindra Ltd

• Victory Electric Vehicles International Private Limited

• Li-ions Elektrik Solutions Pvt Ltd

• Y C Electric Vehicle

• Best Way Agencies Pvt. Ltd.

• Tvs Motor Company Limited

• Avon Cycles Ltd

• Goenka Electric Motor Vehicles Pvt. Ltd.

• Energy Electric Vehicles

• Thukral Electric Bikes Pvt Ltd

• Saera Electric Auto Pvt. Ltd.

• U P Telelinks Ltd

• Khalsa Agencies

• Atul Auto Limited

• Tunwal E-motors Pvt. Ltd.

• Altigreen Propulsion Labs Pvt Ltd

• Dilli Electric Auto Pvt Ltd

• Piaggio Vehicles Private Limited

• Speego Vehicles Co. Pvt. Ltd.

• Shigan Evoltz Limited

• Lohia Auto Industries

• Omega Seiki Pvt Ltd

• Keto Motors Private Limited

• Grd Motors

• Etrio Automobiles Private Ltd.

• Om Balajee Automobile India Pvt Ltd

• Scooters India Limited

• Mlr Auto Ltd

• Bajaj Auto Ltd

• Kabira Mobility Llp

• Continental Engines Private Limited

• Microcon I2i Private Limited

• Euler Motors Pvt Ltd

• Sks Trade India Pvt Ltd

• J.s. Auto Pvt Ltd.

• Ola Electric Technologies Private Limited

• Booma Innovative Transport Solutions Pvt Ltd

• Lectrix Ev Pvt. ltd.

• Balan Engineering Private Limited

• Maruthisan Private Limited

• Okaya Ev Pvt Ltd

• Smartomatic Vehicles Private Limited

• Efev Charging Solutions Pvt Ltd

• Bgauss Auto Pvt.ltd

• Battre Electric Mobility Pvt Ltd

• M/s. Bounce Electric 1 Private Limited (formerly known as M/s. Twenty-Two Motors Pvt Ltd)

• Fitwel Mobility Private Limited

• Altius Ev Tech Pvt Ltd

• Green Evolve Private Limited

• Chetak Technology Limited

• Hero Motocorp Limited

• Tork Motors Pvt Ltd

• Ti Clean Mobility Private Limited

• Tata Passenger Electric Mobility Limited

• Tata Motors Limited

• Sokudo Electric India Pvt Ltd

• Godawari Electric Motors Private Limited

• Mahindra Last Mile Mobility Limited

• Bajaj Auto Limited

• Terra Motors India Private Limited

• Quantum Energy Limited

Is the current FAME 2 scheme sufficient?

The Central government has prescribed a target that 30 percent of all passenger cars should be electric cars by the year 2030. This includes an optimistic mix where 80 % of bikes and scooters should be electric scooters and bikes by the year 2030. All the parties are engaged in joint efforts on the issues of production, charging infrastructure, and what can be done to bring about a future with lesser carbon emissions and no dependence on fossil fuels. There are many types of electric scooters out there, only a few of which qualify for the FAME scheme. Recently, there has been a clamor for e-bikes to also be included.

Nevertheless, the production companies have moved with the trend and congratulated the government for this development. Subashan Venu, a Member of the Board of TVS Motor Company, wore a broad smile while making this announcement. "The government has been great in its support to EVs," stated Mr. Mehta, "Our company believes that the future of mobility solutions is linked with sustainability and we are investing our thoughts and resources in this direction." The better incentives offered for electric two-wheelers will in turn increase penetration. The immigration policy should demand the transfer of knowledge through the training of local scientists.

It’s already noticed the movement toward electric vehicles rising, that is, 150 thousand electric-powered vehicles sold by the end of this June, the majority of which are electric scooters. This approach is anticipated to raise this number to nearly 300,000 units including low-speed electric scooters as well, Sohinder Gill, Director General of the Society of Manufacturers of Energy-efficient Vehicles said in 2022 Even though the government expected them to be more than a million scooters, the numbers are good, so far. The government should thus commend itself for a good and progressive direction.

Conclusion:

The adoption of EVs has picked up the pace, and their cost and efficiency are getting better. This means that infrastructure also has to up the pace regarding provision. They were a way of boosting the process of facilitating the shift by first and foremost eliminating the most formidable consumer obstacle - the imminent purchase of the EV. The FAME 2 subsidy is also the youthful, modern version of the mobility that a lot of people would like to use. Thus the problem is perfectly dealt with and people move from the old to the new form of transportation.

With ongoing time, an increasing number of people will perceive electric scooters and bikes, for instance, the TVS iQube, as fuel for their daily travel. Moreover, in November 2021, these numbers demonstrated a major increase, as 42,067 electric scooters and bikes were sold against the sale of 2,285 units the previous year. EVs have been developed over time to the pinnacle of their performance and this accessibility has made a better case for electric vehicles to be India's future mode of transportation. Furthermore, we have 2G, 3G,4G, and 5G cellular network providers queuing to seize this new opportunity.

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