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FAME II Summary
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Published on 12th Apr 21

FAME II Summary

  Government has approved Phase-II of FAME Scheme with an outlay of Rs. 10,000 Crore for a period of three years commencing from 1st April 2019. Out of total budgetary support, about 86 percent of fund has been allocated for Demand Incentive so on create demand for xEVs within the country.

This phase aims to get demand by way of supporting 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars (including Strong Hybrid) and 10 lakh e-2 Wheelers. However, depending upon off-take of various category of xEVs, these numbers may vary because the provision has been made for inter also as intra segment wise fungibility.

Only advanced battery and registered vehicles are going to be incentivized under the scheme. With greater emphasis on providing affordable & environment friendly public transportation options for the masses, scheme are going to be applicable mainly to vehicles used for conveyance or those registered for commercial purposes in e-3W, e-4W and e-bus segments. However, privately owned registered e-2Ws also are covered under the scheme as a mass segment.  

  FAME-II will offer an incentive of Rs 1.5 lakh each to 35,000 electric four-wheelers with an ex-factory price of up to Rs 15 lakh, and incentive of Rs 13,000 each to twenty thousand strong hybrid four-wheelers with ex-factory price of up to Rs 15 lakh.

It will support 7,090 e-buses with an incentive of up to Rs 50 lakh each having an ex-factory price of up to Rs 2 crore.

The scheme will have a Rs 1,500-crore outlay in 2019-20; Rs 5,000 crore in 2020-21 and Rs 3,500 crore in 2021-22. it'll cover buses with EV technology; electric, plug-in hybrid and powerful hybrid four wheelers; electric three-wheelers including e-rickshaws and electric two-wheelers.

An inter-ministerial empowered committee, 'Project Implementation and Sanctioning Committee' (PISC), headed by the heavy industry secretary, shall be constituted for overall monitoring, sanctioning and implementation of the scheme.

"In order to rationalise the incentives across segments and across vehicle technologies, it's initially proposed to increase uniform demand incentive at Rs 10,000 per KWh for all vehicles including connect hybrid EVs and powerful hybrid, except buses. this may be subject to review and revision by PISC," the notification said.

Besides, to encourage conveyance , for buses, initial uniform maximum demand incentives at Rs 20,000 per KWh is proposed subject to review and revision by PISC. the quantity of incentives for buses may further be subject to competitive bidding among the first equipment manufacturers, conducted by public sector transport undertakings supported the opex (operational expenditure) model.

The demand incentives for electric buses are going to be provided only on the opex model adopted by state or city transport corporations and other public entities working in transport sector to reinforce the fleet of electrical vehicles.

The proposed incentives would be reviewed annually or earlier by the PISC supported price trends for various components and assemblies and market parameters like offtake of vehicles.

To begin with, the cap on incentives for buses are going to be 40 per cent of the value of vehicles and for all other categories, it'll be 20 per cent, the notification said.

To meet the qualifying criteria for demand incentives, a hybrid and electric vehicles, including its variants, should be manufactured in India and have such percentage of localisation as could also be notified from time to time, the notification said.

The demand incentive for all segments, except buses, shall be disbursed through an e-enabled framework and mechanism found out under the Department of Heavy Industries.

The scheme also envisages support for fixing of adequate public charging infrastructure to instill confidence amongst EV users.  

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