The Union cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposal for implementation of Phase-2 of Electric Vehicle Scheme ‘Faster Adoption and Manufacturing of Electric Vehicles in India’ (FAME).
For adoption of FAME India Phase II, Cabinet Committee of Economic Affairs on Thursday approved a Rs 10,000-crore ( ~ US$1.4 Billion) package, which will offer car buyers in the country upfront incentives on purchase of electric vehicles. The package announced will also be used for setting up charging infrastructure and focussing on electrification of public transport.
Applicable only on vehicles costing less than Rs 15 Lakhs (~ US$21,177), the subsidies would be offered based on the battery capacity of the vehicle, ranging from buses and cars to 3-wheelers and motorbikes.
The scheme also proposes for establishment of charging infrastructure, whereby about 2700 charging stations will be established in metros, other million plus cities, smart cities and cities of Hilly states across the country so that there will be availability of at least one charging station in a grid of 3 km x 3 km.
Establishment of Charging stations are also proposed on major highways connecting major city clusters. Charging stations will be established on both sides of the road at an interval of about 25 km each.
The scheme with total outlay of Rs 10,000 Crores over the period of 3 years will be implemented w.e.f. 1st April 2019.
FAME Phase II is the expanded version of the present scheme titled ‘FAME India I’ which was launched on 1st April 2015, with total outlay of Rs 895 crores.
The second phase of the scheme was awaited for a year but it repeatedly got postponed to finally approved this month, as the government think tank NITI Aayog and various ministries have had a tough time building consensus with each other.
India has set a target of achieving 30% electric mobility by 2030 in order to cut reliance on fossil fuels to curb pollution and reduce its import bill.
To recall, in September last year the PMO had sought reworking of a EV policy draft to offer incentives of as much as $759 million (₹5,500 crore), which will mostly be use to encourage local manufacturing of lithium-ion (Li-ion) batteries used in EVs.
Meanwhile, a Chinese EV company, Sunra, which boast of being No.1 in sales volume in the world, is planning to set up its manufacturing facility in India.
In January 2017, a draft of India’s 10-year energy blueprint has revealed that the government is expecting as much as 57% of the country’s total electricity capacity to come from non-fossil fuel sources by the year 2027 – a significant increase over the India’s Paris agreement targets, which has asked the member countries to reach 40 percent non-fossil fuel electricity by the year 2030.
Besides, car manufacturers like Tata and Mahindra, cab-hailing firms like Uber and Ola are also actively contributing to India’s EV Mission.
In November, Uber tied up with Mahindra & Mahindra (M&M) to explore deployment of electric vehicles (EVs) on the cab aggregator’s platform in several cities across India.