5 Reasons FAME 3’s ₹10,000 Crore Push for Electric Vehicles is a Win for Everyone

Electric vehicles (EVs) have been making a lot of buzz lately, and for good reason! They’re cleaner for the environment, quieter on the roads, and can even save you money on fuel costs in the long run. But the cost of an EV can sometimes be a bit daunting. 

Here’s where the government’s upcoming FAME 3 ((Faster Adoption and Manufacturing of Electric Vehicles) scheme comes in, aiming to be a game-changer for EV adoption in India. With a massive budget of Rs. 10,000 crore, FAME 3 promises to make EVs more attractive for everyday customers. 

FAME 3 will continue the Electric Mobility Promotion Scheme (EMPS), which was introduced as a temporary plan when FAME 2 ended on March 31, 2024. FAME 2  provided a 15% subsidy on the sale price of electric scooters in the country.

FAME 3 will be sent for approval to the Union Cabinet shortly after the new government takes office in June. EMPS, designed to support sales of electric two-wheelers and three-wheelers until the general elections are over, has a total allocation of Rs. 500 Crore and will run for four months until July.  The government aims for a 30% market share of electric vehicles by 2030

Electric vehicle sales in India by year and type.

Let’s delve into how FAME 3 could make owning an EV a more realistic possibility for you.

5 Reasons FAME 3’s EV Push is Good For Everyone

Bringing Down the Price Barrier

FAME 3  offers subsidies to manufacturers and consumers, effectively bringing down the price of electric two-wheelers, three-wheelers, and even public buses. This translates to significant savings for the customer. 

Focus on Two-Wheelers and Public Transport

FAME 3 prioritizes electric two-wheelers, recognizing their immense popularity in India. This targeted approach means a larger chunk of the budget goes towards making these everyday vehicles more affordable. Similarly, the scheme focuses on electric public buses. FAME 3 aims to make these electric buses a regular sight on our roads, benefitting your wallet and the environment.

 A Wider Electric Vehicle Ecosystem

The beauty of FAME 3 isn’t just about immediate savings. By making EVs more accessible, it encourages manufacturers to invest in research and development. This, in turn, leads to a wider variety of electric vehicles in the market. This competition between manufacturers can also drive down prices in the long run, creating a win-win situation for you and the environment.

Economic Growth and Job Creation

The shift to electric vehicles will stimulate economic growth through the development of a new industry sector. This includes the manufacturing of EVs, batteries, and charging infrastructure. The investment is expected to create numerous jobs in these areas, from research and development to production and maintenance. Additionally, it can boost ancillary industries such as software development for vehicle management systems and renewable energy sectors for charging infrastructure.

A Greener Future

Saving money is great, but there’s a bigger picture here. FAME 3 isn’t just about getting EVs cheaper but will promote a cleaner and more sustainable future for our planet. Traditional gasoline-powered vehicles contribute significantly to air pollution. You’re actively reducing your carbon footprint by opting for an electric vehicle. Think of it as a small step you can take towards cleaner air for your family, friends, and everyone around you.

Key Takeaways of FAME 3

Here’s a breakdown of the key points regarding the upcoming FAME 3 scheme:

• Fresh Start for Incentives: Existing certifications under FAME 2 won’t be valid. Manufacturers will need to re-apply for incentives under the new scheme.
• Shorter Duration: The initial rollout of FAME 3 is expected to be for two years, compared to the five-year span of FAME 2.
• Electric Buses Get Priority: FAME 3 is likely to increase the number of electric buses subsidized for purchase by state transport departments, promoting cleaner public transport.
• Uncertain Future for Electric Cars: Subsidies for electric cars, even for commercial use, are currently out of scope. Discussions are ongoing regarding the need for such incentives. A proposal suggests offering subsidies only for electric cars priced below Rs 15 lakh, similar to FAME 2. Hybrid cars might also be included if passenger cars are considered.
• Focus on Two-Wheelers and Three-Wheelers: FAME 3 will likely prioritize two-wheelers and three-wheelers, the dominant segment in Indian transportation. While the exact subsidy amounts are yet to be confirmed, reductions compared to FAME 2 are expected (around Rs 10,000 for electric two-wheelers and Rs 50,000 for three-wheelers). Incentives based on battery capacity (Rs 5,000 per kWh) will likely continue.
• Promoting Electric Vehicle Adoption through EMPS Incentives: EMPS is designed to boost the sales of 372,215 electric vehicles, comprising 333,387 electric two-wheelers and 38,828 three-wheelers. Incentive benefits are exclusively provided to vehicles equipped with advanced batteries to promote the adoption of cutting-edge technologies.
• Promoting Advanced Technology: FAME 3 aims to encourage the adoption of the latest technologies. Incentives will likely be linked to vehicles equipped with advanced batteries.
  

When Can You Get Your Hands on an Electric Vehicle?

The exact rollout date for FAME 3 is yet to be announced, but reports suggest it’s coming soon. The government is likely waiting for the new administration to take office and finalize the details. However, with a dedicated budget of Rs 10,000 crore, the future of electric vehicles in India looks promising.

A Few Things to Keep in Mind

While FAME 3 is exciting news, it’s always good to do your research before making a big purchase. Here are a few things to consider:

• Charging infrastructure: Are there enough charging stations in your area? This is an important factor, especially for electric cars.
• Range anxiety: How far can an electric vehicle travel on a single charge? This will depend on the specific model you choose.
• Maintenance costs: Electric vehicles generally require less maintenance than traditional gasoline vehicles.

The Road Ahead

The government’s commitment to electric vehicles, highlighted by initiatives like FAME 3, marks a significant step towards a cleaner future. With increased affordability, a wider variety of options, and a growing charging network, owning an EV is becoming more accessible for everyone.

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