Govt dithers on subsidy, EV makers fear losing fame
NEW DELHI : The government has yet to take a call on whether to extend the FAME-II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) incentives beyond 31 March, two officials privy to the discussions said, even as electric vehicle makers seek certainty on continuation of the scheme that aims to promote clean mobility in the country. The officials cited a global trend where electric vehicle subsidies have been tapering off in major economies, adding that the same shall be done in India.
“As of today, there is no FAME-II beyond March 31 and the government is yet to take a view on whether there should be a FAME-III", one of the officials cited above told Mint. “But what is certain is subsidies will come down across the board—for every vehicle segment," the second official added.
An inter-ministerial committee, with the heavy industries ministry as the nodal agency, is currently evaluating the proposed incentive scheme that will likely replace or extend FAME-II. While demand-side subsidies, which lower the price of a vehicle for a customer, for EVs are unlikely to come to a complete halt, their quantum will be significantly reduced in the new scheme, which the ministry of heavy industries has envisioned as an extension, or “mirror" of the existing ₹10,000 crore FAME-II scheme.
The move will be in line with the government’s moves to gradually reduce subsidies. However, the officials cited above said that the timeline for this reduction will now be tighter than anticipated earlier.
That is, the new scheme is likely to have a smaller outlay for a two-three year period, instead of five years. From June 2023, the Centre significantly cut the subsidy on electric two-wheelers to customers under its FAME-II
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