Govt Approves FAME II Scheme, Electric Cars to Get Subsidy of Up To Rs 2.5 Lakh


Under this scheme, the government will offer subsidy to 10 lakh electric two-wheelers, five lakh electric three-wheelers, 55,000 four-wheelers and 7,000 buses.

Image for representational purpose only

The union cabinet chaired by Prime Minister Narendra Modi has approved the implementation of Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) scheme for promotion of electric mobility in the country.

The scheme with an outlay of Rs 10,000 crore over a period of three years will be implemented from April 1, 2019. It is the expanded version of the present FAME India 1 scheme that was launched on April 1, 2015 with a total outlay of Rs 895 crore.

Under the scheme, a total of 55,000 electric cars will be offered a subsidy of up to Rs 2.5 lakh and 20,000 hybrid cars will be offered a subsidy of Rs 20,000.


However, this subsidy for electric cars are exclusive for passenger electric cars and will be made available only to taxi aggregators. There will be no subsidy on electric cars for private use.

The scheme will also support 10 lakh electric two-wheelers, five lakh electric three-wheelers, and 7,000 buses. The subsidy on electric buses could go up to Rs 60 lakh.

The bigger the battery, bigger the subsidy

These subsidies will be calculated on the basis of battery capacity which will be Rs.10,000 per kWh for all vehicles and at Rs.20,000 per kWh for buses.

However, the government said that the benefits of the incentives will be extended to only those vehicles fitted with advanced batteries using lithium ion or other new technologies.

Further the scheme envisages setting up of about 2700 charging stations across the country so that at least one charging station is available in a grid of 3×3 km2.

The FAME II scheme will also offer a host of incentives such as exemption from paying road tax, registration fees and parking charges for both electric and hybrid vehicles.

These initiatives are being taken by the Government of India with a target to enhance share of electric vehicles from a current 1 per cent to 40 per cent by 2030.



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