According to a report by the Economic Times, the second phase of the Rs 10,000 crore Faster Adoption and Manufacturing of Electric Vehicles in India (Fame-II) is expected to be discontinued after 2023-24. Instead, the benefits may be given through the production-linked incentive (PLI) scheme. The Fame-II scheme was launched to support 1 million EV two-wheelers (E2W) and 7,000 electric buses (e-buses) in India.
The Fame scheme allows companies to offer a discount of up to 40% on the cost of locally manufactured vehicles and claim it as a subsidy from the government. However, the Ministry of Heavy Industries has launched an investigation into alleged misuse of subsidies by two-wheeler EV makers.
The Centre has set aside Rs 25,938 crore under the PLI scheme for the automobile and auto components industry. It was launched in September 2021. The benefits under the PLI scheme are given to manufacturers. “The PLI support for ACC, automobile, and auto component industry will start getting disbursed from FY24 and gain momentum in subsequent years. These will make manufacturing costs of all vehicles, including EVs, cheaper in the country,” an official told ET.
Around 115 companies have filed an application under the PLI scheme. According to the report, the PLI program has been successful in attracting proposed investments in manufacturing automobiles and components of Rs 74,850 crore, of which Rs 45,016 crore is from approved applicants under the Champion OEM Incentive Scheme.
The move to discontinue the Fame-II scheme and switch to the PLI scheme comes as a part of the government’s push towards electric mobility in the country. The government’s aim is to achieve 30% EV penetration by 2030. The PLI scheme is expected to provide a boost to the manufacturing of EVs and components in India.
The Indian government’s support for EVs is part of a broader push towards sustainable development in the country. The government has set an ambitious target of achieving 450 GW of renewable energy by 2030. The PLI scheme is expected to contribute towards achieving this goal by providing a boost to the manufacturing of EVs and components, thereby promoting the adoption of clean energy.
The shift towards the PLI scheme is expected to make manufacturing costs of all vehicles, including EVs, cheaper in the country. This, coupled with the government’s push towards electric mobility, is expected to result in increased adoption of EVs in the country. The government’s support for sustainable development is a positive sign for the future of the automobile industry in India.
