The Modi government will likely launch the third edition of its electric vehicle incentive scheme, FAME (Faster Adoption and Manufacturing of Electric Vehicles), within the first 100 days of its new term. The scheme will have a budget of about
₹10,000 crore and offer financial incentives for electric two-wheelers, three-wheelers and government-owned buses.
This new scheme will be similar to FAME 2, which ended in March 2024. FAME 2 provided a 15% subsidy on electric scooters. However, it is still undecided if FAME 3 will include electric cars, even for institutional buyers like taxi companies.
FAME 3 will continue the Electric Mobility Promotion Scheme (EMPS) that started after FAME 2 ended on March 31. EMPS, with a budget of
₹500 crore, supported the sales of electric two-wheelers and three-wheelers for four months until July.
The FAME scheme was introduced to boost local manufacturing and sales of electric vehicles by providing demand incentives to customers. Companies seeking these incentives need to apply for new certification under FAME 3.
Unlike the five-year duration of FAME 2, FAME 3 will initially be valid for two years. The government had supported the purchase of 7,000 electric buses under FAME 2 and FAME 3 is expected to increase this number.
FAME 3 is likely to exclude subsidies for electric cars, even for commercial use. There are ongoing discussions about whether electric cars in India need subsidies. The current proposal for FAME 3 suggests incentives for electric cars priced under
₹15 lakh, similar to FAME 2.
Hybrid cars might also receive support under FAME 3, if passenger cars are included and they adhere to the price cap. The government will introduce new guidelines and companies seeking benefits will need to get re-certified.
