Electric Vehicle Scheme in India: Subsidy on Car/Two Wheeler
The union minister has announced to extend the FAME scheme by two years to March 31,2024. FAME is an acronym for faster adoption and manufacturing of Hybrid and electric vehicle. FAME scheme was launched in 2019 to promote electric vehicles in the country till the end of 2022. The scheme was brought in effect from 1st April 2019 for development of electric vehicles and faster adoption of electric vehicles.
Electric Vehicle Scheme in India
The FAME scheme has been extended for phase 2 that’s is till 31st march 2024. To boost the adoption of electric vehicles, the union government has announced increased incentives for two-wheeler electric vehicles and three-wheeler electric vehicles. The increase in incentives for electric-two wheelers are up to 50% from Rs.10,000 per kwh to Rs.15,000 per kwh.
In 2019, when FAME scheme was launched, the budget for the scheme was estimated to be Rs.10,000 crores. The government was expected to spend the money for buying 7,090 electric buses, 35000 four-wheelers, 500,000 three-wheelers and 1 million two-wheelers. The reality was quite different. The subsidy for electric vehicles could not bridge the price gap with combustion engine vehicles.
Electric Vehicle Subsidy Scheme 2022
Due to some rules and other norms, people were hesitated to buy electric vehicles. Till 26 June 2022, around 78045 vehicles have been benefitted from FAME. The benefitted vehicles include 59,984 electric two-wheelers, 16,499 electric three-wheelers and 1,562 electric four-wheelers. All these states have availed the benefit of FAME scheme.
All states are making strong policies to promote electric vehicles and persuade the citizens in buying electric vehicles than IC engine vehicles. Many people have criticized the phase 2 of FAME as they believe phase 2 will be more emphasized on high-speed electric two-wheelers. In 2020, FAME 2 eligible electric two-wheelers were sold 5% less than they were sold in 2019. In 2020, nation-wide lockdown could have caused the decline in sales of the electric vehicles.
Electric Vehicle Subsidy for Cars
State-wise all electric vehicles registration
Highlights of the scheme
Objective of scheme
It is high time for the government officials to reduce the supply of fossil fuel vehicles. These combustion engine vehicles deteriorate the environment and release harmful pollutants. These pollutants are not good for the health of people. Cleaner modes of transport are required given that everyone uses two-three-wheelers daily. The air pollution has risen twice since the last decade and better policies are required to tackle this.
Electric Vehicle Subsidy For Two Wheelers
Electric vehicles are the future but it is a long road. Citizens have to be convinced to use electric vehicles by providing subsidies on batteries or manufacturing of the cars. In Norway, more citizens are driving electric cars as compared to fossil fuel cars. This has been achieved via subsidies. There is no import tax on the import of the electric cars and subsidies are given to the citizens for using electric cars, such that fossil fuel driven cars are more expensive and rarer in the country.
This needs to be implemented in India as well. The way to achieve this is by educating the people on the importance of the electric vehicles and better policies by the government. Electric vehicles should be more accessible to the general public. Many car companies are moving towards electric vehicles.
EVs in India
According to a survey conducted by Deloitte, data of various countries and EVs sold in the countries. According to the data, India lags behind other developed countries like China, Europe, United states and Canada. In 2019, 7.2 million units of EVs were sold. Out of this, 47% were sold in China, 25% in Europe and 21% in united states. Only 170,000 EVs units were sold in India.
EV Subsidy Scheme Apply online
Why India requires EVs?
India is the best market for any product. EVs are said to boost post-pandemic for economic recovery. The main aim of EVs in the country is to reduce the oil import and encourage green industrial policy. Electric vehicles will reduce the air pollution and mitigate climatic change.
In 2019, 0.5% of electric cars were sold in India. The sale of electric cars will accelerate in coming years with more people buying the cars. More two-wheeler electric vehicles are sold in India as compared to three-wheeler electric vehicles.
Various encouraging policies have been launched by the union and state government. Many states have launched better policies to increase the EVs in particular states. For instance, In Hyderabad, initial 200,000 electric vehicles have been exempted from road tax and registration fees. The Gujarat government has launched electric vehicle policies, wherein subsidies will be provided to students buying two-wheeler EVs and rickshaw drivers. Subsidies will be provided to self-employed people buying three-wheelers.
Union government will provide subsidies on batteries. India can become ma market hub for electric vehicles, such that subsidies alone are not enough, private players should be invited in the market. Through private investments, the competition is likely to increase such that the price for the vehicles can decline. Better quality electric cars with better features will be available in the country. Recently, Tesla has announced to open a manufacturing unit in Karnataka and is expected to invest 300 million USD in electric vehicles in India.
India has to make right policies and investment portfolios to invite electric vehicle manufactures. Subsidies should be increased and red tapism should be reduced in the country’s framework.