FAME Subsidy For Electric Two-Wheelers Set To Expire Soon, Details Here

According to the Report, the subsidy for electric two-wheelers may stop in a few weeks since the government is unwilling to undertake the third phase of Faster Adoption and Manufacturing of Electric Vehicles, or FAME III.

According to sources, the finance ministry and other arms of government see little benefit in prolonging electric vehicle (EV) subsidies. The Ministry of Heavy Industries supported FAME in response to domestic producer demand.

When the government lowered the subsidies earlier this year, demand for electric two-wheelers fell, but it now appears to be stabilizing. As a result, government officials have maintained that the transition to cleaner fuels will occur spontaneously since it makes economic sense to run them despite their higher initial costs, according to reports.

The government hopes that around 10 lakh two-wheelers will be eligible for the subsidy by the conclusion of FAME II, which is accessible to two-, three– and four-wheeled vehicles utilized for public transit. This is because money was moved in response to local player demand. The initiative was reportedly granted a total of Rs 10,000 crore.

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Meanwhile, the Ministry of Heavy Industries pursued a more ambitious plan that has yet to gain traction. The denial to allow a third phase comes as the government considers a new strategy to entice high-end electric car manufacturers such as Tesla and others to build in India for both domestic and international markets.

The government is currently debating the idea, which might resemble a phased manufacturing plan or a production-based reward system. Furthermore, some of the companies’ FAME violations may have caused the decision to reject any further financing.

The demand for electric two-wheelers has surged in the country’s south and west, while it remains low in the north and east. According to reports, the creators of these enterprises hope that a new lease on life will allow these vehicles to have a wider pan-India impact at a time when major resources are being dedicated to establishing charging infrastructure and public awareness.

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The national government established the FAME subsidy scheme in April 2015 with a Rs 75 crore budget to encourage the sales of electric vehicles. The plan entailed compensating dealers of electric cars (EVs) with financial incentives to reduce the cost of ownership for potential automobile purchasers.

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