The FAME III subsidy scheme is anticipated to be unveiled by the government on February 1, the day of the announcement of the Union Budget of India. The government offers financial incentives to automakers to encourage the production of electric vehicles in India through the FAME programme, which stands for Faster Adoption and Manufacturing of Electric Vehicles in India. This is being done to encourage the market’s adoption of EVs.
Launch of FAME III
In order to keep EV costs under control, electric car makers are anticipating that FAME III will be implemented when FAME II expires in March 2024. Manufacturers are currently concerned about the availability of subsidies since without them, EV prices would be very high. Having said that, although FAME II was unveiled in 2019 with a Rs 10,000 crore budget spread over five years, the amount set out for FAME III in the Union budget is still uncertain.
Subsidies under the new FAME programme will assist in preventing the price of EVs from rising to a point where buyers will find it challenging to afford them. For instance, one of the biggest components raising the total sticker price of an electric car is the cost of batteries.
We anticipate that FAME III will follow the same rules as FAME II. Therefore, the government will keep pressuring OEMs to primarily obtain parts from regional producers and assemble EVs in India. For those in the market for an EV, the launch of FAME III should be welcome news as other electric two-wheelers, including as the upgraded Matter Aera and the Ather Rizta, are anticipated to hit the market this year.
