Fame 2 Subsidy: A Comprehensive Guide on Eligibility, Amount, Benefits, Last Date, and Process
Due to inadequate local value addition, Indian EV manufacturers are coming under increased scrutiny about their eligibility for FAME-2 subsidies. Additionally, investors should be aware that even though EV businesses are looking for an extension into FY2024, if recent news sources are to be believed, the program may be stopped after the next fiscal year. The second stage of India's flagship program to support the production and distribution of electric vehicles is called FAME-2. The government may instead concentrate on assisting the EV sector in the future by offering tax breaks, fee waivers, and continuous production-linked incentive programs for the production of batteries and auto/auto parts. In this post, we briefly discuss some of these measures.
Table of content
What is Fame 2 Subsidy?
Faster Adoption and Manufacturing of (Hybrid and) Electric Automobiles in India, or FAME, is a government initiative to incentivise electric vehicle subsidies. As a component of the National Mission on Electric Mobility 2011/National Electric Mobility Mission Plan 2020, the EV incentive program was introduced in 2013. The primary features of the subsidy are as follows:
The first phase of the FAME I scheme was authorised for a two-year duration, starting on April 1, 2015.
The EV subsidy scheme has been frequently renewed ever since. The most recent extension of FAME's first phase was until March 31, 2019.
The FAME system makes use of the Demand Incentive Disbursement Mechanism (DIDM).
The government has previously determined the amount of electric car subsidies for each vehicle category (hybrid, fully electric, etc.) based on battery characteristics and technology.
The second phase of the electric car incentive scheme, known as FAME II, went into effect on April 1, 2019. With a budget of Rs. 10,000 crores, the government started a three-year incentive program in April 2019. The new FAME II program's increased subsidy for electric cars (two-wheelers) is one of its main draws. At first, the incentive for two-wheeler EVs was Rs. 10,000 per kWh. It is now Rs. 15,000 per kWh, a 50% increase. Furthermore, a 20% cap on the e-vehicle subsidy has been increased to 40% of the vehicle's cost. The Rs. 10,000 per kWh electric vehicle (four-wheeler) incentive remains the same. The maximum incentive amount for an electric vehicle is Rs. 1.5 lakhs.
Fame 2 Subsidy on Electric Scooters
Over the course of the subsidy, Phase II of this program seeks to support one million electric two-wheelers. The government would provide a subsidy of Rs. 20,000 per vehicle for the specified number of registered automobiles. Similar to its previous phase, the program is only available to two-wheelers that can go 80 kilometres on a single charge and reach a minimum speed of 40 km/h. The government plans to establish 2700 charging stations nationwide in addition to providing subsidies for the purchase. Smart cities, hilly states, metro stations, and even roads will be included.
Eligibility Criteria for Fame 2 Subsidy
You must be a person who satisfies the following requirements in order to qualify for FAME 2:Â
You need to have a legitimate ID.Â
It's likely that you have never previously claimed an electric two-wheeler FAME 2 subsidy.Â
The name on the ID proof and the name entered at registration must be identical.
Companies Approved for Fame 2 Subsidy
Over fifty businesses were approved for the incentive. They all fit into one of the two groups listed below. They are either producers of electric cars or they provide infrastructure for electric vehicles. Among the well-known names on this list are TVS Motors, Tata Motors, and Ola Electric Technologies.
Amount of Fame 2 Subsidy
The government subsequently raised the FAME 2 subsidy amount from Rs. 10,000 per kWh to Rs. 15000 per kWh, with a maximum limit of 40% of the vehicle cost. But a subsequent government declaration has once more lowered the subsidy margin. This notification lowers the upper cap to a maximum of 15% of the cost of an electric vehicle as of June 1, 2023. For instance, the greatest subsidy amount that you could have received for purchasing an electric scooter prior to June 1st was Rs. 40,000. However, the subsidy amount has been capped at Rs. 15,000 after June 1st. As a result, the price of electric vehicles has gone up by over 25%.
Fame 2 Subsidy Benefits
The Central Government's FAME 2 subsidy enables users to purchase electric vehicles at a reduced cost. Customers are encouraged to choose electric vehicles over those that run on petrol as a result. They can also contribute to preventing pollution in the environment and promoting less use of fossil fuels thanks to this. The offer has been further enhanced by the introduction of state-specific electric vehicle subsidies by a number of governments. Therefore, you can take advantage of extra discounts on top of the FAME 2 subsidy if you purchase electric vehicles in states like Gujarat and Maharashtra.
How to Claim Fame 2 Subsidy?
To be eligible for the FAME 2 subsidy, you must do the following:Â
Go to the Ministry of Heavy Industries' official webpage.Â
Click on the FAME India Phase II option after navigating to it.Â
You will be taken to a form that you must complete after clicking the button.Â
Click "Submit" after completing the form according to the guidelines.Â
You are eligible to receive the FAME 2 subsidy after your documentation and completed information have been validated.
Conclusion
The switch from petrol and diesel-powered automobiles to electric vehicles has become urgently necessary due to the finite supply of fossil fuels on Earth. Despite the challenges this plan has faced due to many variables like COVID-19, analysts say customers are responding favourably to this move. The Indian government has also chosen to extend the program through 2024 due to COVID-19. Therefore, if you intend to get an electric car, this can be the ideal moment. In addition to electric two-wheelers, this program is available for three- and four-wheelers, including hybrids, and public passenger cars.
FAQ
Q1. What is the validity of Fame 2?
The budgetary expenditure will remain in effect until March 31, 2024, or until the funds become available, whichever comes first. Subsidies for electric two-, three-, and four-wheelers will be offered. Remarkably, Rs 5,884 crore in subsidies have already been given by the government under the plan.
Q2. What is the Fame 2 scheme's target?Â
By supporting 7000 e-buses, 5 lakh e-3-wheelers, 55,000 e-4-wheeler passenger cars (including strong hybrids), and 10 lakh e-2-wheelers, this phase seeks to create demand.
Q3. What is the Fame 2 subsidy vehicle list?
Electric two-wheelers, three-wheelers, four-wheeler passenger cars, and e-buses are among the EVs eligible for subsidies under the FAME II program.
Q4. What is the Fame 2 subsidy on electric scooters?
Electric scooters in India are eligible for the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME II) subsidy, which is Rs 10,000 per kWh of battery and is capped at 15% of the vehicle's ex-factory price. If the vehicle qualifies, the subsidy is automatically applied to the purchase price.
Q5. Is Fame 2 subsidy available in Odisha?
Recently, Odisha has implemented alluring EV incentives: 15% of the purchase price of electric two- and three-wheelers is the amount of the subsidy.
Q6. Is Fame 2 subsidy available in Gujarat?
One of India's most alluring EV policies is provided by Gujarat: Electric automobiles can receive up to Rs. 1.5 lakh in subsidies, electric two-wheelers up to Rs. 20,000, and electric three-wheelers up to Rs. 50,000.
Q7. Is Fame 2 subsidy available in Maharashtra?
In Maharashtra, a subsidy of a maximum of up to Rs. 25,000 is given on two-wheelers. Three-wheelers get benefits up to Rs. 30,000, while four-wheelers have a maximum benefit up to Rs. 2.5 lakh.
Q8. Is the Fame 2 subsidy still available?
The FAME-II electric vehicle (EV) subsidy is set to expire on March 31st, and a new program has been implemented for the following four months. As a result, if EV subsidies are discontinued after July 2024, the EV industry may become more competitive, which could result in price wars as well.
Q9. Will there be a subsidy for Fame 3?
Under the new scheme, Rs 500 crore has been set aside for electric ambulances, while Rs 3,679 crore in subsidies have been made available to encourage EVs under FAME III. Over 14,000 e-buses, 3.16 lakh electric three-wheelers, and 24.79 lakh electric two-wheelers would all be supported under FAME III.
Q10. What is the Fame 3 subsidy?
The interim Electric Mobility Promotion Scheme (EMPS) 2024, which is scheduled to end in September, will be replaced by FAME-3. In 2019, the second phase of FAME was launched, requiring a three-year initial investment of ₹10,000 crore. Later, it was extended to March 2024 at an extra cost of ₹1,500 crore.
Q11. What is the FAME 2 Subsidy?
The FAME 2 Subsidy is a government initiative to promote electric vehicles (EVs) in India by providing financial incentives to buyers.
Q12. Who is Eligible for the FAME 2 Subsidy?
Eligibility extends to individuals, businesses, and public transport operators purchasing certified electric vehicles under the scheme.
Q13. What Types of Vehicles Qualify for FAME 2?
Electric two-wheelers, three-wheelers, four-wheelers, and electric buses meeting specific criteria are eligible for the subsidy.
Q14. What is the Incentive Amount Under FAME 2?
The subsidy amount varies by vehicle type and ranges from ₹10,000 per kWh for two-wheelers to larger amounts for electric buses and cars.
Q15. How Can I Claim the FAME 2 Subsidy?
The subsidy is applied directly to the vehicle price by the dealer when you purchase an eligible EV.
Q16. What is the Primary Goal of the FAME 2 Scheme?
The scheme aims to reduce vehicular pollution, promote electric mobility, and create a sustainable EV ecosystem in India.
Q17. Are There Any Limits on Subsidy Claims?
Yes, each vehicle type has specific subsidy limits based on battery capacity and cost. Two-wheelers are capped at 40% of the vehicle's cost.
Q18. How Does FAME 2 Support Public Transport?
It incentivizes the purchase of electric buses and supports charging infrastructure to enhance EV adoption in public transit.
Q19. What Documents Are Required to Avail of FAME 2?
Buyers need a valid ID, vehicle registration details, and purchase receipts to validate the subsidy claim.
Q20. What Are the Key Changes in FAME 2 Compared to FAME 1?
FAME 2 has a larger budget, broader focus on public transport, and increased incentives for higher battery capacity EVs.
Q21. Can Businesses Avail the FAME 2 Subsidy for Fleet Vehicles?
Yes, companies purchasing EVs for commercial use, such as taxis or delivery services, can benefit from the subsidy.
Q22. How Long Will the FAME 2 Scheme Be Active?
The scheme is active until March 31, 2024, or until the allocated budget is exhausted.
Q23. Does FAME 2 Cover Charging Infrastructure?
Yes, the scheme also provides financial support for setting up charging stations across India.
Q24. Which States Offer Additional Incentives with FAME 2?
States like Maharashtra, Delhi, and Gujarat offer additional subsidies and incentives to EV buyers alongside FAME 2.
Q25. How Can I Check if a Vehicle is FAME 2 Approved?
You can verify the vehicle's eligibility through the manufacturer's website or by checking the official FAME India portal.
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