The total electric vehicles incentivised by the Central government under the FAME II scheme are expected to touch 2 lakh by the end of this month, reflecting acceleration in shift from ICE vehicles to electric products in the country, led by electric two-wheelers.

In calendar year 2021, about 1.4 lakh electric vehicles that include 1.19 lakh electric two-wheelers, 20,042 electric three-wheelers and 580 electric four wheelers have been incentivised as of December 16, 2021, amounting to a total incentive sum of about ₹500 crore under Phase-11 of FAME.

Also, 861 Electric buses have been deployed under FAME II, Overall, the total number of electric vehicles incentivised under FAME II stood at about 1.85 lakh, according to an official note.

Industry analysts point out that given the current momentum for electric vehicles, in particular electric two-wheelers, the total number of incentivised vehicles would cross the 2 lakh mark by the end of this month.

Covid pandemic

FAME India II Scheme was redesigned in June 2021 based on experience particularly during Covid-19 pandemic and feedback from industry and users. The revised FAME II programme led to faster proliferation of electric vehicles as it enabled lowering of upfront cost of electric vehicles.

Demand incentive for electric two wheelers was increased to ₹15,000/kWh from ₹10,000/kWh with maximum cap increased to 40 per cent from 20 per cent of the cost of vehicles. Also, the scheme was extended for a further period of two years, i.e. till March 2024.

Also read: Tata Motors incorporates electric vehicle subsidiary

“Significant financial incentives are being offered for e2Ws under the Centre’s FAME-II scheme and select state EV policies and the same have materially altered the total cost of ownership (TCO) in favour of EVs and has led to a surge in demand for the segment over the past few months. This has spurred investments by various start-ups in the e2W space, and has also aroused the interest of incumbent players, who have announced aggressive plans to ramp up their portfolio in this segment,” said Shamsher Dewan, Vice President & Group Head - Corporate Ratings, ICRA.

After revision of FAME II in June 2021, the sales of electric two wheelers increased to more than 5,000 per week from 700 per week in the earlier period.

Charging infra boost

The Union Ministry of Heavy Industries has sanctioned 1,576 EV charging stations and letters of award (LOA) have been issued across nine expressways and 16 highways as of December 16, 2021. Also, LOAs have been issued for 35 charging stations in a few cities. Overall, LOAs have been issued for 1,797 charging stations in cities under FAME II.

Also read: Auto component sector turnover up 65% at ₹1.96-lakh cr in April-Sept

As of December 16, 2021, 104 EV charging stations, including 13 under FAME II, have been commissioned across cities and expressways.

Related Topics