{"id":35602,"date":"2023-05-25T12:28:26","date_gmt":"2023-05-25T06:58:26","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=35602"},"modified":"2025-04-21T09:17:19","modified_gmt":"2025-04-21T03:47:19","slug":"fame-scheme-will-the-latest-government-move-kill-indias-nascent-electric-vehicles-evs-boom","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/fame-scheme-will-the-latest-government-move-kill-indias-nascent-electric-vehicles-evs-boom\/","title":{"rendered":"EV revolution in India and FAME India Scheme"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>Why in News?<\/strong><\/li>\n<li><strong>National Electric Mobility Mission Plan (NEMPP)<\/strong><\/li>\n<li><strong>The FAME India Scheme<\/strong><\/li>\n<li><strong>What is Driving the EV Revolution in India?<\/strong><\/li>\n<li><strong>How and why the Government is Reducing Subsidies?<\/strong><\/li>\n<li><strong>Possible Impacts on the the EV revolution in India<\/strong><\/li>\n<li><strong>Way Ahead<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme was launched under the National Electric Mobility Mission, <strong>to encourage electric and hybrid vehicle purchase by providing subsidies.<\/strong><\/li>\n<li><strong>The government is slashing subsidies<\/strong> for the electric 2-wheelers segment &#8211; a regressive step which will drag India&#8217;s EV revolution.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>National Electric Mobility Mission Plan (NEMPP):<\/strong><\/h2>\n<ul>\n<li>The <strong>Ministry of Heavy Industry <\/strong>launched the NEMMP 2020 in <strong>2013<\/strong>.<\/li>\n<li><strong>Targets:<\/strong>\n<ul>\n<li>Deploying 5 to 7 million EVs in the country by 2020.<\/li>\n<li>Deploying 400,000 passenger battery electric cars (BEVs) by 2020 in order to avoid 120 million barrels of oil imports and 4 million tons of CO2 emissions.<\/li>\n<li>Lowering of vehicular emissions by 1.3 to 1.5% by 2020.<\/li>\n<li>Total investment required &#8211; INR 20,000 &#8211; 23,000 cr (approx 3 billion USD).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>The FAME India Scheme:<\/strong><\/h2>\n<ul>\n<li>A part of NEMPP, the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India (FAME India) scheme, has been administered by the <strong>Ministry of Heavy Industry<\/strong> since 1st April <strong>2015<\/strong>.<\/li>\n<li>Under the scheme, <strong>subsidies <\/strong>are being given to promote manufacturing of electric and hybrid vehicle technology and to ensure <strong>sustainable growth<\/strong> of the same.<\/li>\n<li><strong>Subsidies are meant to bring a price parity<\/strong> between vehicles that have electric motors and fossil fuel-run engines, thereby<strong> nudging buyers<\/strong> to go for the cleaner option.<\/li>\n<li>Its first phase &#8211;<strong> FAME I<\/strong>, ran for four years until 2019.<\/li>\n<li>Under the<strong> FAME II<\/strong> (which ends this financial year &#8211; March 2024), companies can offer <strong>a discount of up to 40% on the cost of locally manufactured vehicles<\/strong> and claim it as a subsidy from the government.\n<ul>\n<li>Under this scheme, the subsidies could range from <strong>\u20b915,000-60,000 <\/strong>for a two-wheeler.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<figure class=\"media\">\n<div data-oembed-url=\"https:\/\/www.youtube.com\/watch?v=XUZzZtxtQhY\">\n<div><iframe src=\"https:\/\/www.youtube.com\/embed\/XUZzZtxtQhY\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<\/figure>\n<p>&nbsp;<\/p>\n<h2><strong>What is Driving the EV Revolution in India?<\/strong><\/h2>\n<ul>\n<li>The share of EVs in total vehicle sales in India is <strong>currently around 5%<\/strong>. Cumulative sales of EVs in India <strong>crossed the 1 million milestone<\/strong> for the first time in 2022-23.<\/li>\n<li>2-wheelers accounted for more than <strong>60% of all EV sales<\/strong> with an increase of <strong>183%<\/strong> over 2021-22. A major reason for the rise in electric two-wheeler sales is subsidies.<\/li>\n<li>The government target for EV sales <strong>by 2030 is 30% of private cars, 70% for commercial vehicles and 80% for two and three-wheelers<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>How and why the Government is Reducing Subsidies?<\/strong><\/h2>\n<ul>\n<li>Under the FAME-II scheme, the government is increasing the outlay for 2-wheelers but <strong>cutting the subsidy per vehicle<\/strong>.<\/li>\n<li><strong>The budgetary allocation<\/strong> for electric 2-wheelers has been <strong>enhanced <\/strong>to around Rs 3,500 crore from Rs 2,000 crore, <strong>but the subsidy per unit is being reduced to 15%<\/strong> of the ex-factory price from 40% at present.<\/li>\n<li>Earlier, the government had announced that since it was <strong>about to achieve the target<\/strong> of 1 million sales in four years, <strong>the subsidies may not continue<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Possible Impacts on the the EV revolution in India:<\/strong><\/h2>\n<ul>\n<li>The sudden reduction of subsidies could lead to <strong>a rise in per-unit cost for consumers<\/strong>.<\/li>\n<li>Rise in per-unit cost for consumers<strong> may lead to a major decline in EV adoption<\/strong>, impacting the entire industry.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Way Ahead:<\/strong><\/h2>\n<ul>\n<li><strong>A gradual transition with sustained subsidies<\/strong> would have been ideal to ensure market growth and reach the international benchmark of 20% EV adoption.<\/li>\n<li><strong>Production-Linked Incentive scheme<\/strong> in automobile and battery cells will help to bring enhanced investments and will bring down costs for manufacturers<\/li>\n<li>The 2-wheeler makers are looking to <strong>tweak products and prices<\/strong> to stay competitive.<strong> For example<\/strong>, leading manufacturers have launched<strong> lower-spec variants by reducing features and size of batteries.<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3><strong>Q1) How do hybrid electric cars work?<\/strong><\/h3>\n<p>Hybrid electric vehicles are powered by an internal combustion engine and one or more electric motors, which uses energy stored in batteries. A hybrid electric vehicle cannot be plugged in to charge the battery. Instead, the battery is charged through regenerative braking and by the internal combustion engine.<\/p>\n<p>&nbsp;<\/p>\n<h3><strong>Q2) What is the Production-Linked Incentive scheme in automobile and battery cells?<\/strong><\/h3>\n<p>The Program envisages an investment which will boost domestic manufacturing and also facilitate battery storage demand creation for both electric vehicles and stationary storage along with development of a complete domestic supply chain and FDI in the country.<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/economictimes.indiatimes.com\/industry\/auto\/two-wheelers-three-wheelers\/will-the-latest-government-move-kill-indias-nascent-ev-boom\/printarticle\/100470735.cms\" target=\"_blank\" rel=\"nofollow noopener\"><u>Will the latest government move kill India&#8217;s nascent EV boom?<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under the FAME scheme, subsidies are being given to promote manufacturing of electric and hybrid vehicle technology and to ensure sustainable growth of the same<\/p>\n","protected":false},"author":5,"featured_media":35603,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-35602","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/35602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=35602"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/35602\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/35603"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=35602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=35602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=35602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}