FAME India Scheme: Benefits For Electric & Hybrid Vehicles

Posted on: Mar 27, 2023 | 3 mins | Written by: HDFC ERGO Team

FAME India Scheme: Benefits For Electric & Hybrid Vehicles

The Indian automotive industry is slowly yet steadily embracing the growing trend of hybrid and electric vehicles as viable options for personal as well as public transportation. Hybrid cars combine petrol/ diesel engines with electric motors that use energy stored in batteries or other sources such as solar power. As per studies, the market share of such vehicles has grown exponentially in India over the past few years, with many significant car/ automobile manufacturers offering their own models. Just like the world over, in India too, it is believed that electric vehicles (EVs) can help meet many environmental, economic, and social goals.

In an initiative to encourage the use of EVs and hybrid cars, the Indian government launched the FAME scheme. Read on to learn all about the FAME India scheme and how you can benefit if you are planning to buy an electric or a hybrid vehicle. We would also discuss how having the right electric car insurance is crucial.

What Is FAME India Scheme?

The Faster Adoption and Manufacturing of Hybrid and Electric Vehicle scheme, better known as FAME, is an initiative of the government to encourage the use of hybrid and electric vehicles and thus reduce the burden on diesel and petrol vehicles. The scheme, which has been designed with multiple objectives launched in the year 2015 under the National Electric Mobility Mission Plan.

With the aim to stimulate the production of electric and hybrid vehicles, the first phase of FAME India was to cover a 3-year period, that was up to 31st March 2018. The scheme later received an extension till 31st March 2019. On 1st April 2019, the scheme came into its currently prevalent second phase of 3 more years. However, the government recently announced that the FAME 2 scheme would be continued up to 31st March 2024.

Take a look at the table below to understand the key highlights of the scheme:

Name of the Scheme	FAME India Scheme 2023 (National Electric Mobility Mission Plan)
Launch of FAME Subsidy Phase 1	1st April 2015
Launch of FAME Subsidy Phase 2	1st April 2019
Launched by	Department of Heavy Industries
Objectives of the FAME India scheme for electric vehicles	To help reduce the air pollution To bring advancement in eco-friendly and sustainable technology
Official Website	www.dhi.nic.in

What are the objectives of the FAME India Scheme?

The main objectives of the FAME scheme are listed below:

● To reduce the demand for fossil fuels like petrol and diesel and replace them with EVs

● To reduce the emission of vehicles and lower the pollution levels in the country

● To encourage automobile manufacturers and providers to produce higher numbers of FSAME EVs

● To better establish an eco-system for electric charging of vehicles by setting up enough charging stations

● To help make EVs and hybrid vehicles easily available to the general public that too at an affordable rate

● FAME 1 and FAME 2 scheme propose to convert at least 30% of transportation into EVs by the end of 2030.

What are the Features and Benefits of FAME India Scheme?

To discuss the features and benefits of the FAME scheme, let us look at the FAME 1 and FAME 2 scheme individually.

Phase - 1 of FAME

● Phase 1 of the scheme focused on 4 key sectors:

1. Demand Creation

2. Technology Platform

3. Pilot Project

4. Charging Infrastructure

● By the time the first phase came to an end, about 427 charging stations were installed by the government

● The government allotted a total of INR 895 crores to cover the function of Phase 1.

Phase - 2 of FAME

● Under the second phase, the government proposes to offer more incentives to the EV manufacturers so that they can reduce their cost of production and consequently reduce the selling price of the vehicles

● The government also offered subsidies to the buyers by making these vehicles all the more affordable

● For Phase 2 of the FAME scheme the government has allotted a hefty budget of INR 10,000 crores

● The government plans to install 2700 charging stations

● Under this phase, an incentive of INR 20,000 would be provided to the 10 lakh registered electric two-wheelers.

● Over 35,000 four-wheelers over the ex-showroom price of INR 15 lakhs would receive an INR 1.5 lakh incentive.

Who Is Eligible for FAME India Scheme?

If you are an electric vehicle manufacturer or a provider of any electric vehicle infrastructure, you would be eligible for FAME electric vehicles subsidy.

How to Avail Benefits Under Fame India Scheme?

In order to avail benefits under Fame India Scheme’s latest phase, applicants will have to follow the steps mentioned below:

Step 1: Visit the official website of the Ministry of Heavy Industries.

Step 2: From schemes/programs drop down menu, select FAME INDIA II scheme.

Step 3: Click on FAME2 Portal and fill the application form.

Step 4: Follow the instruction and complete the procedure.

Challenges in EV adoption in India

While there is a long list of the benefits that the FAME scheme proposes, there are also some challenges that may bring some hindrance to the advancement of the scheme. Some of the common problems faced under the FAME scheme are listed below.

● As there is still a lack of a universal charger ecosystem, there is a common concern among EV users about inadequate charging facilities

● The irregularities between the pricing of the ICE, and electric vehicles make the latter a far more expensive alternative. The incentives offered by the government often seem inadequate and of a limited period

● There is still no centralised or state institution that can monitor the EV-related policies

● Unlike fuel-powered vehicles, the EV segment offers very few options to the customer, which can be attractive to the buyer.

Car insurance for EVs and Hybrid vehicles

If you are also planning to upgrade to an EV, it is only prudent to invest in suitable comprehensive insurance for your car/ bike. Just like other motorised vehicles, it is mandatory to have at least third party car insurance as per the Motor Vehicle Act. However, for better protection, it is highly recommended that you go for a comprehensive electric car insurance policy for your car. The procedure to purchaseelectric car insurancecoverage is the same as regular car insurance, and you can buy insurance for EVs online in a few simple steps.

Conclusion

Electric and hybrid vehicles are becoming increasingly popular due to their potential to lower emissions. The introduction of the FAME scheme promises to diminish fossil fuel-related issues remarkably. As these vehicles umbrella a number of sectors and segments, the general public can surely benefit from the pocket as well as environment-friendly modes of transportation. From manufacturing to charging stations, a lot of efforts are being made to advance towards reduced dependency on fossil fuels and thus decrease carbon emissions. While most manufacturers have embraced and applauded this initiative by the government, the journey to achieve the real target is going to be a long one.

Disclaimer: The above information is for illustrative purpose only. For more details,please refer to policy wordings and prospectus before concluding the sales.

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