Context: The Inter-Ministerial Steering Committee of the National Mission for Transformative Mobility has decided to incorporate localisation conditions to avail benefits under the FAME-II Scheme.

Outcomes of the recent meeting:

The steering committee has mandated that only companies that meet the 50% localisation threshold will be eligible for the incentives that will be available under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme to boost electric mobility as well as the ‘Make in India’ initiative. The decision has been taken to ensure that the tax payer’s money is not used to subsidise imports and encourage local manufacturing.

What are the salient features of FAME 2 scheme?

1. Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME 2 scheme aims to boost electric mobility and increase the number of electric vehicles in commercial fleets.
2. Target: The outlay of ?10,000 crore has been made for three years till 2022 for FAME 2 scheme.
3. The government will offer the incentives for electric buses, three-wheelers and four-wheelers to be used for commercial purposes.
4. Plug-in hybrid vehicles and those with a sizeable lithium-ion battery and electric motor will also be includedin the scheme and fiscal support offered depending on the size of the battery.

How will FAME 2 scheme help improve charging infrastructure?

• The centre will invest in setting up charging stations, with the active participation of public sector units and private players.
• It has also been proposed to provide one slow-charging unit for every electric bus and one fast-charging station for 10 electric buses.
• Projects for charging infrastructure will include those needed to extend electrification for running vehicles such as pantograph charging and flash charging.
• FAME 2 will also encourage interlinking of renewable energy sources with charging infrastructure.

Background:

FAME India is a part of the National Electric Mobility Mission Plan. Main thrust of FAME is to encourage electric vehicles by providing subsidies. FAME focuses on 4 areas i.e. Technology development, Demand Creation, Pilot Projects and Charging Infrastructure.

Way ahead:

• India needs auto industry’s active participation to ease electric mobility transition. The auto and battery industries could collaborate to enhance customer awareness, promote domestic manufacturing, promote new business models, conduct R&D for EVs and components, consider new business models to promote EVs.
• Government should focus on a phased manufacturing plan to promote EVs, provide fiscal and non-fiscal incentives for phased manufacturing of EVs and batteries. Different government departments can consider a bouquet of potential policies, such as congestion pricing, ZEV credits, low emission/exclusion zones, parking policies, etc. to drive adoption of EVs.