Govt Will Remove Subsidy For Private EVs In 2nd Phase Of FAME

As the media report suggest, the government is thinking to eliminate subsidy considering private electric cars in the new FAME 2.0 (Faster Adoption and Manufacturing of hybrid and Electric vehicles). The FAME scheme has till now rendered a boost of Rs. 1.3 lakh for purchasing a hybrid or electric vehicles in India. As per the government officials, a number of private cars running on the roads were very less in number, and therefore it was announced to provide cash subsidies to cab aggregators. The Finance Ministry is about to declare the 2nd phase FAME scheme.

With implementation, the cab aggregators such as Uber and Ola will move into electric vehicles domain, which is mandated by the government. As per the anonymous industry expert, "The government wants to first electrify the public transport so as to create a sustainable eco-system for electric vehicles. According to them, the number of private electric car owners is far too less and hence public transport needs to be converted first. This will also help in creating awareness of the EVs and side by side, build the infrastructure as well."

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The action, although, will as well prevent the market from going for EVs. A SMEV official mentioned, "Till now, people bought electric vehicles for the incentives the government offered. If you take that away, then how will you promote the use of electric vehicles in the country?"

Toyota India, although supports the government move as it will be assisting in reducing pollution and oil prices. A spokesperson of automobile mentioned, "We think it is a fair decision from the government and we will cooperate with it. However, we do request for a coherent long-term plan instead of achieving short-term goals. This step will only help in reducing the pollution levels and also reduce oil prices, which will significantly help the entire industry."

The central government declared that in March, it will enhance the budget for assisting EVs to Rs. 8,730 crore concerning 2nd phase of the FAME scheme. From the total collection, Rs. 5,550 crore were distributed for demand-side incentives, Rs. 1,000 crore for electric 4-wheelers, and Rs. 2,500 crore for electric buses. Furthermore, the scheme as well adds Rs. 750 crore for Rs. high-speed 3-wheeler holders and 600 crores in terms of incentives concerning high-speed two-wheelers.

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In a whitepaper to the Indian government, the Society of Indian Automobile Manufacturers (SIAM) mentioned that the suggested electrification of vehicles before 2030 is not easy and it plans 40% pure electric sale before 2030. It is as well suggested that full electrification of the vehicles in India will be only possible by 2047.