Date: March 12, 2024. — The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme was initially set to conclude on March 31, 2024, has been extended until July 31, 2024, providing an additional four months of support. This extension is said to include an extra allocation of Rs 500 crore to cover demand incentives for electric two-wheelers and three-wheelers, aiming to prevent any disruptions in the EV sector and to ease the burden on EV manufacturers.
The extension of FAME-II subsidies brings a welcome opportunity for consumers and the electric vehicle (EV) industry alike. Prospective buyers eyeing the switch to electric vehicles will find an extended window of four months to leverage these subsidies. This effectively lowers the initial cost barrier and widens accessibility. This extension not only encourages consumer adoption but also provides a crucial lifeline for EV manufacturers and dealers, offering them the necessary breathing space to manage existing inventory and sustain production momentum. By averting the risk of a sudden sales decline that could have followed the abrupt end of subsidies, the extension bolsters stability within the EV market.
In essence, the extended duration of FAME-II subsidies serves as a win-win scenario. It empowers consumers with enhanced affordability while safeguarding the EV industry against potential downturns. This measure supports the ongoing transition towards sustainable transportation. It reinforces the foundation for continued growth and innovation in the realm of electric vehicles.
The government launched the FAME-II scheme in 2019 with a budget allocation of Rs 10,000 crore. It targets the subsidization of various electric vehicles to promote cleaner and more sustainable transportation options in India. As of December 21, 2023, they have utilized a significant amount of the budget to subsidize over 12 lakh vehicles.
On the other hand, there are also reports from the Ministry of Heavy Industries. They deny the extension, stating that the scheme will conclude as originally planned on March 31, 2024. This conflicting information indicates that there may be some uncertainty about the status of the FAME-II scheme’s extension.
The extension of FAME-II also suggests a potential delay in the launch of the next phase of the scheme, FAME-III. The additional time for FAME-II may provide breathing room for finalizing the details of the new program.
