FICCI Proposes Extension To FAME Scheme In Bid To Reduce Upfront Costs Of EVs In India

• FICCI has submitted a proposal to the Ministry of Heavy Industries for continuation of the FAME scheme.

• Main objective of FAME III is to make upfront cost of EVs more comparable to internal combustion engine vehicles through subsidies.

• FICCI states FAME III is necessary to meet the government's target of 30 percent EV penetration in India by 2030.

The Federation of Indian Chambers of Commerce & Industry (FICCI), which is a non-governmental trade organisation in India, has submitted a proposal for the continuation of the FAME Scheme to the Ministry of Heavy Industries, Govt of India. The main objective of this proposal is to sustain increased adoption of EVs in India and reduce the premiums between the upfront cost of EVs and internal combustion engine (ICE) vehicles.

Why Extend The FAME Scheme?

FICCI has urged the Ministry of Heavy Industries to extend the FAME scheme for the next five years, as the FAME II is set to expire in March 2024. The organisation also highlighted that a sudden withdrawal of the FAME scheme will substantially increase the upfront price of EVs by 25 percent, thus slowing down the process of EV adoption in India.

Currently, the EV penetration in India stands at 5 percent, and FICCI has stressed upon the importance of continuing the FAME scheme to achieve the government's target of 30 percent EV penetration in India by 2030. The proposal also underlines the success of the FAME policy in encouraging companies to invest in the EV sector and other government initiatives like ‘Make in India’.

Commenting on the proposal, Ms. Sulajja Firodia Motwani, Chair of the FICCI EV committee, emphasised the positive role of FAME II in reducing upfront prices of EVs, contributing to the positive momentum in EV adoption. She also mentioned continued demand incentives through FAME III to bridge the price gap between EVs and ICE-powered vehicles for sustained customer interests in EVs.

Let us know in the comments what you think of this proposal.