FAME-II scheme gets a 4-month extension and Rs 500 cr outlay in a breather for EV firms

FAME-II scheme:  In a breather for electric two/three-wheeler manufacturers, the Centre has reportedly  extended its FAME-II (Faster Adoption and Manufacturing Electric Vehicles) scheme by four months to avoid any disruption in the EV industry. 

The scheme was to expire on March 31. The Centre, according to a CNBC-TV18 report, has allocated Rs 500 crore to cover subsidies for demand incentives for e2W and e3Ws until July 31, 2024.

The FAME-III scheme may get nod only after the general elections, the report added. 

EV firms were in a bind over the deadline with many offering heavy discounts in the hope of exhausting their inventories before the March 31 kicked in. 

Bengaluru-based Bounce Infinity and Ola Electric cut the prices of their products by ₹24,000 and ₹25,000 respectively, in the last two weeks.

The FAME II scheme, with a budget outlay of Rs 10,000 crore, was introduced in 2019 for a period of three years, targeting to support 7,000 e-buses, 5 lakh e-3 Wheelers, 55,000 e-passenger cars and 10 lakh e-two wheelers. Of this, a total of 12,16,380 vehicles have been subsidised till now with an expenditure of Rs 5,422 crore (as of December 21, 2023).

At present, electric four-wheelers for fleet operators are currently eligible for FAME 2 subsidy.