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Everything You should know about FAME II Subsidy: The Game Changer for Electric Vehicles
The government of India has been taking initiatives to promote the shift from combustion vehicles to Electric Vehicles (EV) in the country. Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-India) Scheme was one such initiative launched in 2013 to encourage the use of genuine, cost-effective, and energy-efficient electric and hybrid vehicles (xEV) in the country. It began as a part of the National Mission and currently is in Phase II with an outlay of Rs 10,000 crores.
The Phase II of FAME(FAME II) aims to develop the manufacturing ecosystem of electric vehicles and speed up the adoption of electric mobility across the country. Recently, the Department of Heavy Industry (DHI) also came up with a nominal increase in the incentives, especially for two-wheelers, to persuade more users to switch to EVs. With FAME II and electrification of vehicles, the government expects to save over 52,700 litres of fuel per day, reduce 1.3 Lakh Kg of daily CO2 production, and decrease an average of 129 million Kg of overall carbon footprint.
A Glimpse into the Aim and Purpose of Fame II Subsidy
Considering the rise in the global temperature and carbon footprint, the government of India came up with FAME as an initiative to develop cleaner and eco-friendly modes of mobility. The FAME II Subsidy mainly aims to create demand for EVs in the country. It provides fiscal and monetary incentives to support the development of EVs and their technology in India.
The scheme supports different categories of EVs such as Electric Buses, Electric Three Wheelers, Electric Bikes etc., and aims to achieve 6-7 million sales every year from 2021. A sum of the allocation is also set apart for the creation of charging infrastructure throughout the country. Consumers can avail the FAME II Subsidy in the form of the upfront reduced purchase price of hybrid and electric vehicles, which the government will reimburse.
According to the initial proposal, the demand incentive can go up to Rs 20000 for buses and up to Rs 10000 for other vehicles. As a part of the project, the government even sanctioned over 5000 electric buses intending to save about 50 million Litres of fuel and enforce clean mobility in public transportation.
How does FAME II Subsidy benefit Electric Bikes?
While in the beginning, the demand incentive to all EVs under FAME was Rs 10,000 and the subsidy amount for two-wheelers was increased by 50%, amounting to Rs 15000 under FAME II.
Also, with the rapid increase in the demand for two-wheelers in the past year, the government has raised the percentage of incentives offered on the cost of Electric Bikes from 20% to 40%. As a result of the significant revisions in FAME II, the prices of Electric Bikes will decrease by almost Rs 15,000-30,000.
The government is also supporting initiatives to start manufacturing hubs that can produce Electric Bikes locally. As the demand for Electric Bikes increases over time, it will lead to mass production within the country and bring out affordable models of Electric Bikes. Thus, India’s Electric Bike market will thus gain momentum and make the shift from conventional two-wheelers to Electric Bikes easy.
New Pricing Details for Bikes under FAME II Subsidy
The government announced the revised FAME II Subsidy to promote green mobility and make Electric Bikes more affordable. The significant revisions in the scheme, such as an increase in demand incentive and percentage share on purchase cost, will reduce the cost of ownership of Electric bikes incrementally. Thus the incentives under FAME II will be distributed as mentioned below:
- Electric Bike with 1 kWh battery will receive an incentive of Rs 15,000
- Electric Bike with a 2 kWh battery will be eligible for a Rs 30,000 incentive
- Electric Bike with a 3 kWh battery pack and cost between 1 lakh and 1.5 lakh will be eligible for an incentive of at least Rs 45,000
This will also benefit bike rentals across the country by helping them expand their services with more EVs at reduced rates. At driEV, we offer customers pocket-friendly rides with zero emission. With FAME II, customers can enjoy cheaper rides and go green with our quick booking and delivery mechanism. Thus, by making use of benefits under FAME II our initiative looks forward to serving people with safer and more affordable rides.
