FAME - II
vaibhav patil
vaibhav0222@gmail.com
summary
FAME was launched by the Ministry
of Heavy Industries and Public Enterprises in 2015 to incentivize the production
and promotion of eco-friendly vehicles including electric vehicles and hybrid
vehicles.
The Scheme operates in two
phases.
Phase I: started in 2015 and was
completed on March 31st, 2019.
Phase II: started from April 1st,
2019, will be completed by March 31st, 2022.
FAME II Duration: 3 years (April
1, 2019 onwards)
Fund Allocation: ₹10,000 crores
($1.4 billion)
Nodal Department: Department of
Heavy Industry – responsible for planning, implementation and review of the
scheme
Applicability: public
transportation fleets; registered commercial vehicles for buses, four wheelers
and three wheelers; privately-owned two-wheelers
Localization: requires 50% of
vehicle parts made in India
INTRODUCTION
FAME (Faster Adoption and
Manufacturing of (Hybrid ) Electric Vehicles) India was a scheme launched in
April, 2015 under National Electric Mobility Mission (NEMM).
FAME Scheme India phase II is expanded scheme
of FAME phase I and also aims to encourage faster adoption of Electric and
hybrid vehicle.
Also, to establish a necessary
charging infrastructure for electric vehicles.
The outlay of Rs 10,000 crore is
eleven times more than the outlay of FAME I which was Rs. 895 crore.
Finance Minister Piyush Goyal who
declared electric mobility as one of the ten guiding principles for India’s
Development Vision 2030.
The aim of the program is to ramp
up the manufacturing and adoption of EVs as well as the charging infrastructure
ecosystem in India
Budget Approved:-
Earlier this year, the government
approved a budget of Rs 10,000 crore for the second phase of FAME (Faster
Adoption and Manufacturing of Electric vehicles) which has been implemented in
the country from 1 April 2019.
The centre has sanctioned ₹8,596
crore for incentives, of which ₹1,000 crore has been earmarked for setting up
charging stations for electric vehicles in India.
86% of the funds are set aside to
be distributed as an upfront incentive to reduce the vehicle cost.
TARGET:-
Focus areas of FAME
The scheme covers Electric and
Hybrid technologies like Mild Hybrid, Strong Hybrid, Plug in Hybrid &
Battery Electric Vehicles.
FAME focuses on 4 areas i.e.
Technology development, Demand Creation, Pilot Projects and Charging
Infrastructure.
The scheme reportedly supports
the manufacturing and sale of 10 lakh electric two-wheelers, five lakh electric
three-wheelers, 55,000 electric four-wheelers and 7000 electric buses.
FAME was launched by the Ministry
of Heavy Industries and Public Enterprises (MoHIPE) in 2015 with a vision that
30 per cent of the automobiles sold in India will be electric by 2030.
The country has set a target of
having 15 per cent of total vehicles on road as electric by 2024
India may require all electric
auto-rickshaws by 2023 and all electric motorcycles by 2025, as proposed by
NITI Aayog.
The FAME II scheme focusses on
incentivising high-speed electric vehicles, charging stations and commercial
electric vehicles among others.
The centre may incentivize the
purchase of 7,090 electric buses with an outlay of ₹3,545 crore, 20,000 hybrids
with ₹26 crore, 35,000 four-wheelers with ₹525 crore and 500,000 three-wheelers
with ₹2,500 crore.
Purpose:-
It aims at promoting cleaner
mobility alternatives and reducing the country’s dependency on imported fossil
fuels and cut down vehicular emissions which is a huge contributor to air
pollution.
Applicable EVs
The subsidy on EVs is applicable
to commercial vehicles, public transport vehicles and two-wheelers.
Period FAME 2
The FAME 2 scheme is applicable
for a period of three years from 2019 to 2022.
Conditions or limitation:
only vehicles which are powered
by lithium-ion batteries or a more advanced power source can avail the
government benefits.
Under the scheme, buses have to
be priced under Rs 2 crore, plug-in hybrids under Rs 15 lakh, three-wheelers
under Rs 5 lakh and two-wheelers have to be under Rs 1.5 lakh to be eligible
for incentives.
Charging Stations development under
FAME 2
Adequate public charging
infrastructure is a key objective of the FAME II program.
As part of EV charging
infrastructure plans, around 2,700 charging stations will be set up across
different locations in Tier-1 cities.
The plan is to ensure availability of at least
one charging station in a grid of 3kms x 3kms.
The establishment of charging stations are also
proposed on major highways connecting major city clusters.
On such highways, charging
stations will be established on both sides of the road at an interval of about
25 km each.
For charging infrastructure, the
centre will invest to set up charging stations for public sector units and
private players.
For every electric bus one
slow-charging unit has been proposed and for 10 electric buses one
fast-charging station.
This scheme will also encourage
interlinking of renewable energy sources with charging infrastructure.
How It will Work:
inter-ministerial
panel had finalised the roadmap for Faster Adoption and Manufacturing of
(Hybrid) and Electric Vehicles (FAME) II scheme
- The emphasis of
this scheme is on electrification of the public transportation which includes
shared transport.
- For electric buses,
demand incentives on operational expenditure will be delivered through
State/city transport corporation (STUs).
- 3W and 4W segment
incentives will be applicable mainly to vehicles used for public transport or
those who are registered for commercial purposes.
- In e-2Ws segment,
the focus will be on the private vehicles.
Let us tell you that
through this scheme, it is planned to support 10 Lakhs e-2W, 5 Lakhs e-3W, 55000
4Ws and 7000 Buses.
- The incentives will
be offered by the Government for electric buses, three-wheelers and
four-wheelers to be used for commercial purposes.
- In the scheme
Plug-in hybrid vehicles with sizeable lithium-ion battery and electric motor
will also be included.
Subsidy OFFERED
Three
categories of vehicles are eligible for FAME II incentives: public
transportation fleets; registered commercial vehicles for buses, four-wheelers
and three-wheelers; and privately-owned two-wheelers.
Following
are the incentives given to various categories of vehicles under FAME – II.
Incentives will be given on the basis of
prescribed ex-factory price limits.
Electric
two wheelers: incentives will be provided for 10 lakh registered electric
two-wheelers of Rs 20,000 each.
e-rickshaws:
incentives to 5 lakh e-rickshaws of Rs 50,000 each.
Electric
four wheelers: An incentive of Rs 1.5
lakh each to 35,000 electric four-wheelers with an ex-factory price of up to Rs
15 lakh.
Hybrid
four wheelers: an incentive of Rs 13,000 each to 20,000 strong hybrid
four-wheelers with ex-factory price of up to Rs 15 lakh.
e-buses:
support to 7,090 e-buses with an incentive of up to Rs 50 lakh each having an
ex-factory price of up to Rs 2 crore.
FAME
II also includes a localization requirement to source 50% of the vehicle parts
in India
Ø In
three-wheeler and four-wheeler segments, FAME II offers a subsidy of Rs. 10,000
per Kilowatt Hour (KWH) battery for buyers of electric three-wheelers and four
wheelers.
Ø For
example, the average price of an electric car in India is now about 10 lakh
rupees and typically has a battery up to 20 kWh, so the discount under the new
scheme would be Rs. 2 Lakh.
Ø The
scheme plans to support at least five lakh three-wheelers and 55,000
four-wheelers across the country.
Ø However,
buyers of electric and hybrid cars for private use will not be getting any
subsidy under FAME II.
Ø The
subsidy for four-wheelers under the scheme is only for the cars registered for
commercial use and shared mobility services.
Ø According
to experts, this may slow down the penetration of electric mobility in four
wheeler segment among individual users
Ø
Incentives For Two-Wheelers
Ø In
the two-wheeler segment, the focus will be on private vehicles for which the
subsidies amount to Rs. 10,000 for each kilowatt-hour (KWH) of battery
capacity, which is almost 50 per cent of the total battery cost.
Ø Through
the scheme, it is planned to support 10 lakh electric two-wheelers.
Ø
Ø While
the subsidy decided for two-wheelers under FAME II will boost the demands for
Electric two-wheelers with higher battery capacity, it will act as a dampener
for 1KWH, single battery two-wheelers which make up for a large proportion of
the electric two-wheelers market at present.
Ø Incentives for such two-wheelers which give a
speed of 40km/hr and range of 60-70 Km per full charge have been reduced from
Rs. 22,000 under FAME I to Rs. 10,000 under FAME II, making these costlier by
Rs. 12,000.
Ø
As part of the union budget, the
central government reduced the Goods and Services Tax (GST) on EVs from 12% to
5%.
The central government is also
providing an income tax deduction of ₹1.5 lakh ($2,200) on the interest paid on
the loans for EV purchases.
Under FAME II, the users of
electric and hybrid vehicles are exempted from paying road tax, registration
fee, and parking charges.
MoHIPE has made these incentives
as a pre-condition for states to be included in the FAME II.
GST cut on EVs and electric
chargers was a right move post the announcement of FAME II
Public Transport And Cab Services To
Go Electric
The schemes emphasizes on the
electrification of public transportation and shared transportation like cabs,
office pick and drop facilities and other such services.
Financial assistance will be
provided for at least 7000 buses to be deployed across the country with a buyer
incentive at Rs. 20,000 per Kilowatt Hour (KWH) of the battery fitted in the
bus.
For example, if a bus is fitted
with a 250 KWH battery, its buyer will get an incentive of at least Rs. 50
Lakh.
States like Uttar Pradesh, Delhi,
Maharashtra, West Bengal, Karnataka, Tamil Nadu, and Kerala have already
started electrifying
their public transport fleets and other states
are expected to follow soon.
Job Given to States:-
In an effort to ensure clarity in
process, the centre has asked states to frame their EV policy and provide
additional fiscal and non-fiscal incentives to manufacturers and buyers.
Output
Currently, India has a little
over 1.2 lakh units of electric vehicles (excluding the unregistered e-rickshaws)
which make up for less than one per cent of the total vehicles on the road.
Losses
This is done through a
certification process for vehicles.
This process has impacted the
electric scooter manufacturers who were part of the FAME I scheme, to a large
extent incurring huge losses in the process.
after the implementation of FAME
II, India recorded near-zero sales of electric two-wheelers
PROBLEMS
increase in the localisation
level to 50 per cent acted as a big hurdle for the manufacturers.
after FAME II was announced the
vehicles sold under the policy was negligible and there were hardly any
products that qualified for the scheme and the ones that did, were in the
premium category,"
FAME II scheme are applicable
only to vehicles using advanced batteries (excluding lead acid batteries),
Companies
Mahindra, Hyundai and Hero
Electric,
states INVOLVD
Gujarat, Uttar Pradesh, Rajasthan
and Kerala are a few of the states that have already submitted proposals to the
government to purchase electric buses under FAME-II program.
FAME I
The Ministry of Finance had
approved enhancement of the total outlay for the first phase of the scheme from
Rs 795 crore to Rs 895 crore. The scheme was supposed to be implemented over a
two-year period commencing from April 1, 2015. It was to be followed by the
rollout of the second phase. The first phase was extended four times for six
months each.
Phase I (FAME I) was initially
launched for a period of two years but got extended multiple times and faced
many policy revisions in the last four years.
Extension Given
in November 2018 the government
had extended the phase-I FAME scheme till March 2019 or till the release of a
notification for the second phase.
