Over 90% of fund gets used before FAME deadline; supports 1.5 mn vehicles

Government officials stated that some more funds will also be utilised for vehicles that were sold before 31 March but have not yet applied for incentives

The Centre’s ambitious FAME-II scheme for the promotion of electric vehicles (EVs) in the country saw funds utilised touching around 90 per cent on deadline day, that is, March 31, 2024.

Data from the Ministry of Heavy Industries (MHI) shows that the Centre spent Rs 10,253 crore out of the total Rs 11,500 crore allocated for the five-year scheme. These funds were used to support 1.5 million vehicles over the past five years.

Government officials said that some more funds will also be utilised for vehicles that were sold before March 31 but have not yet applied for incentives.

“Some funds will be allocated to provide incentives to manufacturers who sold their vehicles in the previous financial year but applied for incentives afterwards,” a senior official said.

The electric three-wheeler (e3W) category demonstrated the highest fund utilisation, with the allocated Rs 991 crore being fully used.

In the bus category, 94 per cent of the Rs 991-crore allocation was utilised, while in electric two-wheelers (e2Ws), 90 per cent of the Rs 4,756 crore allocation was utilised.

The lowest fund utilisation was observed in the electric four-wheeler (e4W) category, where only 64 per cent of the allocated funds were utilised.

The government has also spent Rs 633 crore out of the allocated Rs 839 crore on EV chargers.

The fund allocation was not fully achieved before the deadline.

This was due to the government's decision in October 2023 to increase the target of the scheme from Rs 10,000 crore to Rs 11,500 crore.

This adjustment came after the MHI exhausted the funds allocated for e2Ws and e4Ws.

In the scheme's initial phase in 2015, the government allocated approximately Rs 900 crore, and this amount surged to around Rs 10,000 crore during the second phase in 2019.

To date, the scheme has provided support to more than 1.5 million vehicles.

The government also raised the target for the number of vehicles from approximately 1.5 million to 1.7 million.

A total of 68 original equipment manufacturers (OEMs) were registered under the FAME-II scheme.

In March, the MHI announced a new scheme, the Electric Mobility Promotion Scheme (EMPS), 2024, with a budgetary allocation of Rs 500 crore, to promote the sale of e2Ws and e3Ws in the country.

A total of 11 EV manufacturers, including Ather Energy, Bajaj Auto, Hero MotoCorp, Ola Electric, and Mahindra were approved under the scheme, Business Standard had reported on April 10.

EV sales in FY24 witnessed a robust increase of over 41 per cent, notwithstanding the subsidy cuts and regulatory shifts.

Total EV registrations in FY24 surpassed 1.6 million, which is significantly higher than last year’s 1.1 million.

All this has pushed the overall EV penetration in the country during FY24 to 6.8 per cent against 5.3 per cent in FY23.

The uptick was despite the government's decision in June to reduce subsidies under FAME to a third of the maximum Rs 66,000 subsidy it was offering on e2Ws.

Powering up 
 

-  Funds allocated for 1.5 million vehicles over five years

- Highest fund utilisation in electric three-wheelers 

- Electric four-wheelers saw lowest fund utilisation at 64%

- Centre spent Rs 10,253 crore out  of Rs 11,500 crore allocated for  the five-year scheme