- FAME II ends in March 2024
- FAME III expected to be announced in the Union Budget
- Subsidies will help manufacturers to continue to price EVs reasonably
The Union Budget of India is going to be announced on February 1, and the Government is expected to announce the FAME III subsidy scheme on that day. FAME or Faster Adoption and Manufacturing of Electric Vehicles in India is a program under which the Government provides subsidies to automobile manufacturers to make electric vehicles in India. This is done to promote adoption of EVs in the market.
FAME II ends in March 2024 and electric vehicle manufacturers are hoping that FAME III will be rolled out to keep EV costs in check. At present, there is concern among manufacturers with regards to availability of subsidies without which prices of EVs would be quite high. That said, while FAME II was introduced in 2019 with a budget of Rs 10,000 crore over the course of five years, as of now there is no certainty of the amount that’ll be allocated for FAME III in the Union budget.
FAME III subsidies will help prevent the price of the EVs from escalating to levels that’ll make it difficult for customers to purchase them. The cost of batteries, for example, is one of the highest factors that adds to the overall sticker price of an electric vehicle.
We expect guidelines for FAME III to be the same as FAME II. So, the Government will continue to push OEMs to largely source components from local manufacturers and build EVs in India.
The roll out of FAME III should come as good news to those in the market for an EV as there are a number of electric two-wheelers that are expected to go on sale this year, including the Ather Rizta and the updated Matter Aera.
