FAME-II Program Revised with Increased Incentives for Electric Two-Wheelers

The demand incentive for electric two-wheelers has been raised to ₹15,000/kWh


The Department of Heavy Industries has announced partial amendments to the Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME-II) program.

Specific demand incentive for electric two-wheelers (E2W) of ₹15,000 (~$205)/kWh has now been announced. Earlier, there was a uniform demand incentive of ₹10000 ($137)/KWh for all vehicles.

Also, the cap on incentive for E2W has been raised to 40% of the total cost of the vehicles. The cap earlier was 20% for all vehicles including E2W.

Demand aggregation is identified as the key to bringing down the upfront cost of electric three-wheeler electrics, on par with the internal combustion engine vehicles for multiple user segments. The details for implementing the initiative are assigned to Energy Efficiency Services Limited (EESL). EESL will aggregate demand for 300,000 electric three-wheelers (e-rickshaws) for multiple user segments.

FAME-II, a three-year program with a budget of ₹100 billion ($1.41 billion), was launched to promote electric mobility. The government had approved the proposal to implement the program from April 2019. The program’s target is to put one million high-speed electric two-wheelers on the road by March 2022. The objective of FAME is to encourage faster adoption of electric and hybrid vehicles by offering upfront incentives on the purchase of EVs and establishing the necessary charging infrastructure for EVs.

In another new clause, the Ministry of Heavy Industries and Public Enterprises has stated that for electric buses, cities with more than four million population like Mumbai, Delhi, Bengaluru, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, and Pune will be targeted. EESL will take care of the aggregation of the demand in the nine cities listed for the remaining electric buses under the operating expenses (OPEX) model.

EESL has so far been aggregating demand for electric cars.

In September last year, the Heavy Industries and Public Enterprises Minister Prakash Javadekar had said in the Lok Sabha that the government had provided a demand incentive of ₹950 million (~$12.9 million) towards 27,201 EVs until September 10, 2020.

While the push of the government is to foster the growth of electric vehicles in the country, in April this year, the Society of Manufacturers of Electric Vehicles noted that some 236,802 EVs were sold in India in financial year (FY) 2020-21, registering a drop of 20% over the sales for FY 2019-20.