Everything You Need To Know About FAME III Policy

The FAME subsidy in India (Faster Adoption and Manufacturing of Electric Vehicles) is all set to return in its third phase as the newly formed NDA Government in 2024 is planning to bring back the FAME III subsidy scheme for EVs by July 2024. In its third iteration, the FAME scheme is likely to get some major changes including something for the hybrid owners as well. Read the complete details about the changes that the upcoming FAME-III policy will bring.

What Is FAME III Policy?

The FAME policy came into effect to bring down the buying costs of electric vehicles. The
first phase of the FAME policy focused on electric scooters and two-wheelers. The FAME-2 subsidy then continued the incentives on the EVs including the three-wheelers that are selling in decent numbers now. However, before the 2024 elections, the FAME-2 subsidy expired. Now, the FAME III policy is being curated to bring down the costs of buying an EV in India. This new policy is likely to go live by July 2024.

Vehicles Covered Under Fame III Policy

As per the reports, a total budget of Rs 10,000 crore has been allotted for the FAME-III policy. The new scheme will focus on electric two-wheelers and three-wheelers primarily. It is because the major chunk of EV sales comes via this segment. The FAME-II subsidy offered a 15 per cent off on the sticker price fthe or the electric two-wheelers. Additionally, the government-owned EV buses are also likely to receive the benefits of the new incentive scheme. This will help in accessing more volumes of green buses across India.

Will Electric Cars Fall Under Fame III Scheme?

While the FAME-I policy offered an incentive for electric cars below the Rs. 15 lakh mark, the FAME-II policy removed it. The FAME-III scheme is also expected to remain unchanged for electric cars including the passenger vehicles as well as commercial vehicles. The total electric car sales currently needs to be more enticing than it appears to be. Hence, this decision is likely to remain unaltered.

FAME III To Offer Subsidy On Strong Hybrid Cars?

It is being reported online that the government is considering offering incentives for strong hybrid cars. Hybrid cars in India like the Toyota Urban Cruiser Hyryder have transformed the mid-size car market in India and buyers' keen interest in the strong hybrid cars has not gone unnoticed by the Government. Hence, a consideration is underway and it is highly possible that there would be an incentive for strong hybrid models. 

However, there could be a catch in it. A price cap is expected to be set to control the incentive flow. If so, the new scheme will push the manufacturers to develop low-cost strong hybrid cars. Maruti Suzuki is said to be working on a new hybrid powertrain and there is a possibility that we could see multiple strong hybrid models launching in the coming years.