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Government of India Extends FAME Scheme for Third Time

FAME India Scheme

The Phase-I of the FAME India scheme has been extended for an additional six months or till the beginning of Phase-II. It will be the third time the Phase-I has been extended. The extension is in line to promote the purchase and usage of e-vehicles.

India: While the government is yet to restrict the outlines and allocate resources to implement the second phase of the Faster Adoption & Manufacturing go Hybrid and Electric Vehicles (FAME) India Scheme, the Department of Heavy Industries has extended the phase one of the program for an additional six months, to promote the purchase and usage of green vehicles.

FAME-India is a part of the National Electric Mobility Mission Plan (NEMMP), launched by the Government in 2015. As a part of the NEMMP scheme, the government would invest approximately Rs 14000 crore to create infrastructure and promote the use of environment-friendly electric vehicles. The automotive industry was to pitch in the extra Rs 10000 crore required for product development and creating a manufacturing ecosystem.

The scheme focuses on four major areas - technology development, demand creation, pilot projects and charging infrastructure for building awareness and increasing utilization of eco-friendly vehicles.

As per the scheme, the battery-operated scooters and motorcycles are eligible for incentives ranging between Rs 1800 and Rs 29000, three-wheeler for incentives in the range of Rs 3300 and Rs 61,000. In four-wheelers, the incentives range from Rs 13,000 to Rs 1.38 lakh, in light commercial vehicles it is from Rs 17,000 to Rs 1.87 lakh, and for buses it is from Rs 34 lakh to Rs 66 lakh.

The Phase one of the FAME India scheme has been extended for the third time. The extension is believed to come into effect from April 1, 2018 and will be valid till Sep 30, 2018.

The Ministry of Heavy Industries & Public Enterprises in a notification informed that the period of the FAME India Scheme is further extended for six months i.e. upto 30th September 2018 or till date of launching of Phase-II of FAME-India Scheme. The extension is deemed to have taken effect on 1st April 2018.

The first Phase of the FAME-India Scheme was launched for a two-year period between 1st April 2015 to 31st March 2017, at an approved expenditure of Rs 795 crore. The scheme was then extended for six months till 30th September 2017 followed by extension till 31st March 2018.

The National Electric Mobility Mission Plan (NEMMP) 2020 has anticipated the sales of about 6-7 Million units of electric vehicles, which will result in fossil fuel saving of around 2.2-2.5 Million tons. This will also result in substantial lowering of vehicular emissions and decrease in carbon dioxide emissions by up to 1.5% by 2020.

The Government of India first offered support to the electric vehicle industry at the end of 2010, with the new and renewable energy ministry announcing a Rs 95-crore incentive scheme for manufacturers. Import duty on batteries was cut to 4% from 26%. Price rebates of up to 20% were offered, bound by a maximum of Rs 1 lakh for an electric car.

 According to TechSci Research, the extension of the Phase-I of FAME India scheme will be a huge stepping stone in line with the government’s vision of achieving e-mobility in the coming years. Under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME), the government is has set a target of achieving 100% electric public transport vehicles by 2023, which will act as a driver for the growth of electric small cars and passenger cars in the country. Electric Vehicle market is anticipated to post robust growth due to growing consumer inclination towards electric passenger cars due to vehicular pollution and its effect on the human health as well as the atmosphere. Moreover, declining prices of electric vehicles, favorable government policies and continuous surge in R&D by several automobile companies to develop premium quality electric vehicles will drive the growth of the electric vehicle market in the coming few years.

According to the recently published report by TechSci Research, India Electric Vehicle Market, By Vehicle Type (Three-Wheeler, Two-Wheeler, Passenger Car & Bus), By Drivetrain Technology (Battery Electric Vehicle Vs. Plug-in Electric Vehicle), Competition Forecast & Opportunities, FY2013 – FY2023, India electric vehicle market is projected to grow at a CAGR of over 37%, during FY2018-FY2023. Robust market growth is anticipated because of rising number of government initiatives such as incentive schemes to encourage adoption of environment-friendly electric vehicles, growing consumer inclination towards electric vehicles, concerns over harmful effects of air pollution, and huge investments by various OEMs for developing more affordable and premium electric vehicles in the coming years.

According to the recently published report by TechSci Research, Global Small Electric Vehicle Market, By Technology (Hybrid Electric Vehicle, Plug-In Hybrid Electric Vehicle, Battery Electric Vehicle), By Battery Type, By Geography, Competition Forecast & Opportunities, 2022”, Global small electric vehicle market stood at around $ 6 billion in 2016, and is forecast to grow at a CAGR of 23% during 2017 – 2022, to reach $ 20.7 billion, on account of increasing consumer inclination towards electric passenger cars coupled with declining prices of electric vehicles. Moreover, the boost in demand for small electric vehicles can be attributed to favorable government policies and continuing surge in R&D investments by several OEMs to develop premium quality and affordable small electric vehicles. All the above stated factors along with growing penetration of small electric vehicles in developing economies are anticipated to positively impact the market over the course of next five years.

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