FAME 3 Subsidy Scheme: All You Need to Know

The Indian government is all set to launch FAME 3 (Faster Adoption and Manufacturing of Electric Vehicles), which will provide cost-effective electric vehicles- two-wheelers, three-wheelers, and government-owned buses. The government is expected to have a budget outlay of Rs 10,000 crore for this proposed scheme. The inclusion of electric cars for taxi buyers remains unclear.

The policies of this scheme are expected to be similar to the previous FAME 2 scheme (which provided a 15% subsidy on electric two-wheelers). The FAME 2 scheme was launched in 2019, and officially expired in March 2024, whereas the new FAME 3 scheme is expected to be implemented after the formation of the new Indian government. 

FAME 3 will replace EMPS (Electric Mobility Promotion Scheme). The latter was temporarily implemented after FAME 2’s tenure ended. This scheme benefits electric two-wheelers by Rs 10,000 and three-wheelers by Rs 50,000 until July, with a budget of Rs 500 crore.

The purpose of this scheme is to encourage local manufacturers to boost EV sales in the country. All the companies that want to benefit from this scheme will be required to apply for certification for FAME 3. This scheme will be valid for two years, whereas FAME 2 has a validity period of five years.

The majority of metropolitan public transport still uses ICE-powered buses, which is why the FAME scheme was implemented to encourage state transport corporations to buy more electric buses. A total of 7,000 electric buses were sold under the FAME 2 scheme, and the FAME 3 subsidy scheme plans to increase this number as much as possible.

Any private or commercial electric car may not benefit from the FAME 3 scheme. Officials are still considering whether electric cars should be incentivized under this scheme or not. The current proposal of the FAME 3 scheme plans to offer subsidies on cars priced under 15 lakh, like the FAME 2 scheme, but that remains unclear. 

Hybrid vehicles may also benefit this time but only if the scheme includes passenger cars as eligible.

Currently, EMPS aims to support the sales of 3,72,215 EVs in the country, consisting of 3,33,387 electric two-wheelers and 38,828 electric three-wheelers. Only the vehicles equipped with advanced battery technology can benefit from this scheme; it will encourage the manufacturers to use the latest technology components in their vehicles.