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MHI Proposes ₹12,600-30,000 Crore For EV Adoption

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MHI has put forth a significant proposal ranging from ₹12,600 to 30,000 crore under the FAME-III scheme, to accelerate the adoption of Electric Vehicles (EVs) by integrating advanced technologies and alternative energy sources.

The Ministry of Heavy Industries (MHI) unveils three proposals for the third phase of the FAME scheme, aiming to boost electric vehicle adoption. These proposals, with budgets ranging from ₹12,600 crore to over ₹30,000 crore, include plans to incorporate vehicles powered by alternative sources such as hydrogen and biofuels. 

However, the Ministry of Finance suggests maintaining the scheme’s outlay consistent with the second phase. MHI has in-principle approval for ₹10,000 crore from the finance ministry’s Department of Expenditure for the FAME scheme.

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The Department of Expenditure is reluctant to allocate more than ₹10,000 crore due to existing production-linked incentive schemes for the automotive sector and advanced chemistry cells. Additionally, the government introduces the PM-eBus Sewa scheme with a ₹57,613 crore budget for 10,000 electric buses. MHI also establishes a ₹4,126 crore payment security fund.

As the Electric Mobility Promotion Scheme 2024 (EMPS 2024) nears its conclusion and with the Budget approaching next month, stakeholders in the automotive industry are advocating for continued support. 

EMPS 2024, designed with a Rs 500 crore budget, aims to facilitate the adoption of approximately 400,000 electric two-wheelers (e2W) and three-wheelers (e3W) by July 31. Industry leaders are urging the Ministry of Heavy Industries (MHI) to extend and expand EMPS or launch a new phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme.

The government has already launched schemes exceeding Rs 1 trillion in total Budget, emphasising fiscal prudence in decision-making. FAME, initiated in 2015 with an initial budget of about Rs 900 crore, saw its second phase funded at around Rs 10,000 crore until its conclusion in March. 

The upcoming third phase of FAME will focus on bolstering public mass transportation and charging infrastructure, potentially spanning two years with subsidies slated to taper off for highly penetrated categories like two- and three-wheelers. 

Industry representatives assert that a budget exceeding Rs 30,000 crore will be necessary to sustain the momentum of EV adoption in India, aligning domestic efforts with global standards in the EV sector.

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