INR 1,500 crore is requested from the finance ministry in the restructuring process. Funding will be raised for two-wheelers while being decreased for three-wheelers. Additionally, four-wheelers will see a modest increase in allocation, but buses will receive less than they currently do.
The Ministry of Heavy Industries (MoHI) is contemplating a reconfiguration of fund distribution within the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) Phase-II scheme, as informed by three informed insiders.
As part of this policy, requesting an added INR 1,500 crore from the finance ministry is contemplation. This would involve boosting funds for two-wheelers while decreasing the allocation for three-wheelers. Conversely, four-wheelers might see a modest increment, but buses would receive a slight cut from current allocations.
|Segment||Current Allotment||Proposed Allotment||Proposed % Change|
|E-2Ws||INR 2,000 cr||INR 5,311 cr||165.5|
|E-3Ws||INR 2,500 cr||INR 987 cr||-60.5|
|E-4Ws||INR 551 cr||INR 750 cr||36|
|E-buses||INR 3,545 cr||INR 3,209 cr||-9|
|Others||INR 1,404 cr||INR 1,243 cr||-11|
|Total||INR 10,000 cr||INR 11,500 cr||15|
The government inaugurated the FAME-II initiative in 2019, boasting an INR 10,000 crore budget spread over three years. This was subsequently extended in 2021 for an additional two years, lasting until March 31, 2024. Public and commercial electric three-wheelers, four-wheelers, and buses are all eligible under this scheme. Incentives are also available for personal, registered electric two-wheelers.
Earlier this June, the E-2W market faced turbulence due to a decrease in FAME-II subsidies, leading to a price increase for several key models. Nonetheless, from July, a consistent monthly recovery in sales was observed. The VAHAN data reveals that from January to September 2023, two-wheelers constituted 57% of all EVs sold nationwide, trailed by three-wheelers at 37% and passenger vehicles at 5%. India’s cumulative EV sales for 2023 surpassed one million within just nine months, echoing the achievement of CY2022.
For the fiscal year 2023-24, MoHI has been sanctioned an unprecedented INR 5,172 crore, marking the highest yearly allocation since the scheme’s inception four years prior.