No More FAME Subsidy For Mild Hybrids

So far, the Faster Adoption and Manufacturing of Electric vehicles (FAME) scheme allowed a concession of Rs 13,000 to electric and hybrid vehicles. Maruti Suzuki's Smart Hybrid Vehicle by Suzuki (SHVS) technology barely meets the criteria by incorporating an extra motor that recharges the battery while coasting and assisting the engine when stressed. The duo is also able to give a seamless start-stop experience while idling, thus helping save fuel at traffic lights.

SHVS-equipped vehicles can return impressive fuel efficiency, as indicated by their ARAI-certified numbers. The Ertiga and Ciaz claim to deliver 24.5 and 28.1kmpl, respectively. To qualify for the subsidy, a vehicle was required to incorporate the auto-start-stop system that shuts down the engine while idling in neutral gear and have a motor that can work in tandem with the engine.

The government would then issue a refund to the dealer, which is, eventually, passed on to the buyer after the purchase. Therefore, the ex-showroom price tag remains unaffected.

Also, the Delhi government offers extra incentive for hybrid and electric car buyers by dropping the VAT from 12.5 per cent down to just 5 per cent, making it a sweeter deal. However, sales of the two cars will remain unaffected as they play in a segment where a small discount of Rs 13,000 isn't enough to persuade a buyer to buy another car.

Full hybrids like the Toyota Camry, Prius, Honda Accord and the recently-launched Lexus cars will continue to benefit from the scheme. All the mild hybrids sold until March 31, 2017, will be eligible for the refund.

As the government believes that the masses have accepted the mild hybrid technology, the next step is to focus on full hybrid and electric vehicles.

Also Read: Maruti Suzuki Ciaz SHVS Hybrid Review

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