Benefits aplenty for EVs under FAME-II

Source: https://www.energybite.co.in/blog-post/benefits-aplenty-for-evs-under-fame-ii/

With a total outlay of Rs 10,000 crore to be spent over a period of three years, FAME-II provides bountiful offerings to promote the sale and manufacture of EVs and also to strengthen the charging infrastructure in the country. Still, a lot more is required to bolster the adoption of electric vehicles at a larger scale.

FAME-II is the expanded version of FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles) scheme, which was launched by the Government on April 1, 2015. FAME-II was notified in March 2019 and it is to be implemented for a period of three years, till 20222.

As the title makes it abundantly clear, the scheme is aimed at encouraging manufacturing, sale and adoption of electric and hybrid vehicles in the country.

• As the title makes it abundantly clear, the scheme is aimed at encouraging manufacturing, sale and adoption of electric and hybrid vehicles in the country.
• FAME-II has a total outlay of Rs 10,000 crore to be spent over a period of three years. A big chunk of the budget has been allocated for educating the public on the use of EVs and creating a demand.
• As the Government aims at providing clean electricity for EV charging stations, the charging infrastructure will also be linked with renewable energy generation.
• The Government needs to partner with public sector undertakings (PSUs) and private companies to fill the lacunae at the earliest so that EV sales graph gets perked up fast.

FAME-II has a total outlay of Rs 10,000 crore to be spent over a period of three years. It will have Rs 1,500-crore outlay in 2019-20; Rs 5,000 crore in 2020-21 and Rs 3,500 crore in 2021-22. A big chunk of the budget has been allocated for educating the public on the use of EVs and creating a demand for electric vehicles. About Rs 1,000 crore has been assigned for building EV infrastructure and setting up charging stations across the country.

Under the scheme, more than Rs 8,000 crore will be offered as incentives for all electric buses and three-wheelers and four-wheelers used for commercial purposes. Vehicles with large-size lithium-ion batteries and electric motors can also avail incentives under FAME-II.

A slow charging station will be installed for every electric bus and one fast charging station for every 10 buses. According to a recent announcement by Union Road Transport Minister Nitin Gadkari, an EV charging kiosk each will be installed at all the almost-69,000 fuel stations in the country. As the Government aims at providing clean electricity for EV charging stations, the charging infrastructure will also be linked with renewable energy generation.

The Government, under FAME-II, will provide an incentive of Rs 10,000 per kilowatt (kW) for two-wheelers, three-wheelers and four -wheelers with a cap of Rs Rs 1,50,000 per vehicle, depending on the size of the battery. A sum of Rs 20,000 per kilowatt (kW) will be provided as incentive for electric buses to boost their sale to state transport bodies.

The Government aims to provide incentives to EV product manufacturers also under the FAME-II scheme. The products coming under the ambit are lithium-ion batteries, electric motors and EV charging devices. It has also directed the state governments to formulate their policies on EV within the FAME-II framework.

As one can make out, the Government is providing multiple incentives and benefits under the FAME-II scheme to boost the sale of EVs in the country. Banks are also ensuring easy loans on EVs with very low interest rates. To encourage increased public spending on EVs, vehicle registration charges and road tax fees are also being waived in many states.

However, two major obstacles still remain in the path of boosting EV sales – high price of electric vehicles and inadequate charging infrastructure. The Government needs to partner with public sector undertakings (PSUs) and private companies to fill these lacunae at the earliest so that EV sales graph gets perked up, thereby giving a boost to the overall economy as well.