EV Manufacturers Received ₹52 Billion in Subsidies Until December 1, 2023

A capital subsidy of ₹8 billion has been provided to three oil marketing companies

December 6, 2023


Subsidies worth ₹52.28 billion (~$627 million) have been disbursed to electric vehicle (EV) manufacturers on the sale of ~1.15 million EVs, as of December 2023, in a bid to improve faster adoption of EVs in India, Ministry of Heavy Industries informed the Lok Sabha.

The subsidies are under the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME ) program that came into force in April 2019 to support the electrification of public and shared transportation.

The program also provided a capital subsidy of ₹8 billion ($96 million) to three oil marketing companies of the Ministry of Petroleum and Natural Gas for the establishment of 7,432 EV public charging stations, Minister of State for Heavy Industries Krishan Pal Gurjar said.

The Ministry also approved 6,862 electric buses to various cities and state government entities for intra-city operations as of November 29, 2023.

Under the FAME India program, concessions are provided to EV consumers in the form of an upfront reduced purchase price of hybrid or EVs, which is then reimbursed to the EV manufacturers.

As of November 29, 2023, a total of 62 EV manufacturers are registered under the program to avail of the demand incentive. The total claims submitted on the portal amounted to ₹50.94 billion (~$611.41 million) as of November 15, 2023, out of which ₹38.15 billion (~$457.90 million) has been disbursed.

In October, Union Minister for Power and New & Renewable Energy R K Singh announced that the government is working on a second Production Linked Initiative program that will cut down the cost of battery storage and boost the adoption of EVs in India.

In the third quarter of the 2023 fiscal year, the sale of EVs across India touched 371,214 units, which is a 40% year-over-year increase from the corresponding period last year.

Earlier this year, the Parliamentary Standing Committee on Industry recommended that the government extend Phase II of the FAME program for at least three years beyond March 31, 2024, to make EVs a norm in the Indian automobile market.

The standing committee noted that FAME Phase-II had set a target to support ~1.56 million EVs in five years. However, until December 2022, it had achieved only 51.96% of the target by supporting 811,725 vehicles.