All about FAME 3: the 10k-crore outlay for EVs

The Indian government is gearing up to launch the third iteration of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, FAME 3. This program aims to accelerate the adoption and domestic production of electric vehicles (EVs) in India.

What is FAME 3 and its purpose?

FAME 3 is expected to offer financial incentives for specific electric vehicle segments:

• Electric Two-Wheelers: This segment is crucial for personal transportation, and subsidies can make EVs more affordable for consumers.
• Electric Three-Wheelers: E-rickshaws and e-carts are essential for last-mile connectivity, and continued support can encourage their wider use.
• Government Electric Buses: Promoting clean public transportation is a priority, with FAME 3 potentially subsidising electric buses used by government agencies.

What are the benefits of FAME 3?

A key question remains regarding the inclusion of electric cars in FAME 3. The government is considering extending benefits to:

• Electric Cars for Institutional Buyers: Subsidies for taxi aggregators and fleet operators transitioning to EVs could incentivize wider EV adoption.
• Personal Electric Cars: The decision on including personal electric cars remains undecided. Affordability is a hurdle, and the government might prioritise other segments initially.

Considerations for FAME 3's success

Several factors will influence the success of FAME 3:

• Scheme Duration: The initial two-year validity period is shorter than FAME 2's five years. This might impact manufacturers' long-term planning.
• Fresh Certifications: All companies seeking incentives will need to re-apply under FAME 3, potentially causing administrative hurdles.
• Battery Infrastructure: A robust network of charging stations nationwide is crucial to address range anxiety and encourage EV adoption.
• Skill Development: Investing in training programs for EV manufacturing and maintenance personnel is essential.

EMPS vs FAME 3: what’s the difference?

FAME 3 will succeed the Electric Mobility Promotion Scheme (EMPS), a temporary bridge introduced after FAME 2 concluded. EMPS currently offers reduced incentives but ensures some level of support until FAME 3 is launched.

FAME 3: a catalyst for change

FAME 3 has the potential to significantly impact India's EV sector. By focusing on two-wheelers, three-wheelers, and buses, it can increase EV adoption, reduce emissions, and promote clean mobility solutions. The decision on electric cars and addressing the considerations mentioned above will be crucial for FAME 3's long-term effectiveness.

Conclusion

The success of FAME 3 requires collaboration between the government, private sector, and consumers. Working together can create a conducive environment for EV adoption, paving the way for a cleaner and more sustainable transportation landscape in India.