Read by: 100 Industry Professionals
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New Delhi: The government has made significant alterations in the latest edition of the subsidy scheme to promote the sale of electric vehicles. Since 2021, the Centre has been operating a scheme to offer subsidies to consumers on purchase of electric vehicles. The latest edition of this scheme was scheduled to end on September 30.
In the new scheme, the scope and contours have changed. First, the scheme has a new name: PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM-EDRIVE). When subsidies began, the scheme was called Faster Adoption and Manufacturing of Electric Vehicles (FAME) and two editions of FAME were completed till March 2024. There was a general expectation that the new scheme will be called FAME III.
Second, the amount of subsidy allocated for electric two wheelers, which account for a bulk of all EVs sold in India, has been reduced drastically – from over INR 5000 crore in FAME II to just INR 3679 crore. And this amount too will be shared with electric three wheelers, hybrid ambulances, electric buses and electric trucks. It is clear that the government believes e2w no longer need any substantial purchase subsidies, since EV penetration in the two wheeler industry has already crossed the 5% mark.
Three, electric passenger vehicles have been excluded from the subsidy scheme altogether, as per an official press release. Industry sources had said earlier that the government wanted to promote public infrastructure and public transport without promoting sales of personal vehicles.
Four, electric trucks have been included in the subsidy scheme for the first time after persistent demand from truck makers. The official statement speaks of trucks being a “major” cause for pollution. Five, the total allocation under the scheme, even after including new vehicle categories of ambulances and trucks, is less than FAME II, at INR 10,900 crore versus INR 11,500 crore.
And six, the government has tightened the process for claiming subsidies after myriad issues and allegations of subsidy misappropriation in FAME II. So now, every buyer will have to get an Adhar-authenticated e-voucher when purchasing any of the vehicles which are eligible for subsidy under the new scheme, submit it to the dealer who will then upload it on the PM-EDrive portal. This signed e-voucher would be essential for the OEM to get the subsidy reimbursement.
The PM-EDrive scheme has also provided INR 4391 crore for procurement of 14,028 electric buses by state transport undertakingsor public transport agencies; trucks have been allocated INR 500 crore. And another INR 2000 crore has been allocated for installing and upgrading the charging network.
