India is eyeing to electrify 25-30% of all its vehicles by 2030 and the FAME II scheme is a much-awaited program that is here to boost the space.
To be implemented from 1st April 2019, the Faster Adoption and Manufacturing of Electric Vehicles [FAME] program is here with its second phase. FAME II brings with it a lofty budget of Rs. 10,000 crore, which could be considered an upgrade from the Rs.895 crore budget of FAME 1 and the initially planned budget of Rs. 4,500 crore for FAME II. With the electric vehicle market still in its initial stages of growth, this scheme is seen to play a key role in enhancing financial allocation and investor confidence in the space.
“We are thankful to the government for considering our demand for a long-term scheme with substantial fund support. The support would encourage associated industry players to invest in the sector, which will further help in creating an ecosystem, locally. We look forward to seeing the final notification from the concerned ministry, which will give us clarity on the government’s roadmap of e-mobility.”
Sohinder Gill – Director General, Society of Manufacturers of Electric Vehicles (SMEV)
The scheme is said to be implemented over a period of 3 years, from 2019 to 2022. The scheme outlays various initiatives, targets and incentives to be offered with regards to shared mobility, public transportation and more importantly – charging stations.
The lack of charging stations has been seen as the greatest inconvenience to the owners of electric vehicles and FAME II endeavors to eliminate this pain point. Of the total outlay, Rs.1,000 crore has been set aside for developing and installing 2700 charging stations, primarily across Tier 1 cities. The idea is to have at least one charging station in a grid of 3x3km. To improve the accessibility of these stations, they would be distributed across highways as well at a distance of 25kilometers.
The program aims to facilitate the manufacturing and sale of 10,00,000 electric two-wheelers, 5,00,000 three wheelers, 55,000 four wheelers and 7,000 buses.
Additionally, hybrids and EVs have been exempted from road tax and registration charges. Incentives worth ₹10,000 shall be offered per kilowatt of lithium-ion battery installed and in order to encourage state transport units (STUs) to buy more electric buses, ₹20,000 per kW shall be offered as an incentive.
However, all good things come with their own Terms and Conditions. The benefits of FAME II shall apply to only those vehicles that are powered by lithium-ion batteries or more advanced sources of power i.e those Hybrid and Electric cars with a range of 120km and minimum speed of 70km per hour. The minimum speed requirement of scooters is expected to be 45km/hr. Moreover, only buses that are priced up to ₹2 crore, strong and plug-in hybrids under ₹15 lakh, three-wheelers under ₹5 lakh and two-wheelers under ₹1.5 lakh are said to be eligible for the incentives. These incentives are primarily for the manufacturers of the same.
However, there are ongoing talks to lax these stringent requirements as Indian car manufacturers do not indigenously manufacture batteries and a lot of other EV car components, which shall invariably lead to fewer vehicles qualifying for the same.
The results of FAME II are yet to be seen. Do you think the Indian government will be successful in achieving its goal?