Budget 2024: Rs.12,000 crore allocation likely for next EV incentive scheme

Finance Minister Nirmala Sitharaman is likely to unveil the third phase of an incentive scheme for electric vehicles in the upcoming interim budget. The government could unveil an expanded third phase of the incentive scheme for electric vehicle in the upcoming interim budget on February 1.
Budget expectations: The government could set aside Rs.10,000-12,000 crore for the third installment of the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme.
The decision to launch FAME III follows demands from the industry to continue the program since other support mechanisms such as the production-linked incentive (PLI) scheme have exclusionary conditions such as a high minimum net worth. Quote unquote: “FAME III will be focused on mass transport such as buses, and personal mobility for two-wheelers while also encouraging adoption of alternative fuel vehicles like hydrogen-powered ones,” an official at the heavy industries ministry said.
Decoding FAME: The scheme incentivizes the sale of electric vehicles with components that are made locally as much as possible.
The Centre had earmarked Rs.895 crore for FAME I, which was in force from 2015 to 2019. This allocation was significantly ramped up to Rs.10,000 crore in FAME II for 2019-24.
In May 2023, incentives under FAME II were lowered to Rs.10,000 per kilowatt hour and capped at 15% of an electric two-wheeler’s ex-factory price.
Challenges aplenty: FAME II aimed to subsidize 1 million electric two-wheelers, 500,000 electric three-wheelers, 55,000 electric four-wheelers, and 7,090 electric buses. The implementation was marred by allegations that some companies had availed benefits without adhering to localization commitments.
There were also cases of companies billing buyers for EV bike chargers and proprietary software separately to keep the price below the Rs.1.50-lakh-per-unit threshold.

Budget 2024 may see FAME III be unveiled

India plans to unveil an expanded third phase of the incentive scheme for electric vehicles in the upcoming interim budget on February 1. The new phase, called FAME III, will focus on mass transport such as buses and personal mobility for two-wheelers. It will also encourage the adoption of alternative fuel vehicles like hydrogen-powered ones. The budget is expected to allocate Rs.

10,000-12,000 crore for the scheme. The decision to launch FAME III follows demands from the industry to continue.

India could unveil an expanded third phase of the incentive scheme for electric vehicles in the upcoming interim budget on February 1, enhancing it to support mass transport and alternative fuels, a top government official told ET.

The budget could set aside Rs.10,000-12,000 crore for the third instalment of the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme.

Government sends notices to EV makers Hero Electric, Okinawa on FAME-II subsidy sops

Micromax co-founder Rahul Sharma’s Revolt Motors and Coimbatore-based electric vehicle manufacturer, Ampere Vehicle, have also received the notices.

EV firms availing FAME subsidies to face tighter scrutiny

EV makers now must produce a certificate from a chartered accountant empanelled with the Comptroller and Auditor General, verifying the extent of imported components in their vehicles before their products can qualify for subsidies under the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India (FAME-India) scheme.

Companies availing of subsidies under the government’s flagship electric vehicles (EV) promotion scheme are facing increased scrutiny from the authorities, after it came to their notice that many manufacturers were providing misleading information.
EV makers now must produce a certificate from a chartered accountant empanelled with the Comptroller and Auditor General, verifying the extent of imported components in their vehicles before their products can qualify for subsidies under the EV subsidize.

Source : ET-Tech India 18 January 2024