Govt Plans 7M Electric Vehicles on Road By 2020, To Give Rs. 1.38L Worth Incentives For Every Car


Electric Vehicles

This new move by the Government can be described as the biggest push to encourage sales of electric and hybrid vehicles in India. Under a unique and innovative scheme named as FAME, Government will provide incentives upto Rs 1.38 lakh for every electric car sold.

Union Minister of Heavy Industries and Public Enterprises, Anant Geete, launched Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) aiming at promoting and encouraging sale of electric and hybrid vehicles.

The launch program of this scheme was organized by The Department of Heavy Industry (DHI) under the Government of India, along with the Society of Indian Automobile Manufacturers (SIAM).

It was announced that the Government aims to bring 6-7 million (60-70 lakh) electric and hybrid vehicles on road by 2020. For the next 5 years, the ministry has estimated that Rs 14,000 crore would be required to successfully implement the scheme. As of now, Rs 795 crore has been allocated which will be utilized under Phase 1, which has been again broken down into two 1-year period: 2015-16 and 2016-17. Out of Rs 795 crore budget, Rs 500 crore would be utilized for giving incentives alone.

The Incentive Scheme & Budget Allocation

Government has broken down the incentives program into several divisions for both battery operated and/or hybrid models. Here are the details:

  • Rs 1800 to Rs 29,000 for Two Wheelers
  • Rs 3300 to Rs 61,000 for Three Wheelers
  • Rs 1.3 Rs 1.38 Lakh for Four Wheelers
  • Rs 17,000 to Rs 1.87 Lakh for Light Commercial Vehicles (LCV)
  • Rs 34 Lakh to Rs 66 Lakh for Buses

In order to be transparent, Minister Geete also provided a details breakdown of the usage of Rs 795 crore budget which will be spent in the next 2 years:

Components of the scheme 2015-16 2016-17
Technology Platform(Including testing infrastructure) Rs 70 cr. Rs 120 cr.
Demand Incentives Rs 155 cr. Rs 340 cr.
Charging Infrastructure Rs 10 cr. Rs 20 cr.
Pilot Projects Rs 20 cr. Rs 50 cr.
IEC/Operations Rs 5 cr. Rs 5 cr.
Total (Rs.) Rs 260 cr. Rs 535 cr.
Grand Total (Rs.) Rs 795 cr.

Hierarchy of Schemes

4 years back, the Union Cabinet had formulated the National Mission on Electric Mobility (NMEM) to encourage the sales and manufacturing of electric vehicles in India. Under this, two bodies were formed: National Council on Electric Mobility (NCEM; operating at the Ministerial level) and National Board on Electric Mobility (NBEM; operating under Secretary level).

Last year, Government had hired an external agency named Booze & Co. to finalize the road map for expanding electric and hybrid vehicles sale in the country, and based on the recommendation of this agency, Modi Govt. had allocated a budget of Rs 795 crore under the annual budget.

Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) is the new blueprint for providing incentives under NMEM.

Implementation of FAME

To cover the whole country, the ministry has divided the implementation into 4 broad sections:

  1. Smart cities (All cities which are being currently converted into smart cities)
  2. 6 major metropolitan cities: Delhi-NCR, Greater Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad.
  3. Cities where more than 1 million citizens reside
  4. All cities of North East

The reimbursements shall be provided directly to the end customer from the manufacturers, who will receive the funds from DHI. This scheme will only cover those cars which are manufactured and/or assembled inside India. Imported electric and hybrid cars are not covered under this scheme.

In 2013, we had reported that TATA and Maruti can jump into electric cars as there were signals that Government may introduce some incentive based schemes in this sector; and the news proved right. Not only will the automobile industry as a whole will get benefited but it will also help in reduction of pollution and saving fuel.

As per rough estimates, if 6-7 million electric vehicles are able to run on Indian roads by 2020, then 9500 million litres of fuel would be saved, the value of which is Rs 62,000 crore (at the rate of Rs 64.95 / litre)

A big step for Indian automobile industry.

Here is the full press release with further details of pilot projects and more.

Will you consider buying an electric car after this announcement of electric car incentives or petrol/diesel based cars will be your top priority? Please reply by commenting right here!

  1. […] Government even launched programs to promote electric vehicles in India, but was there even a choice? Mahindra E2O, Toyota Prius, […]

  2. K.Venkateswarlu says

    I bought a YO Speed scooter 6 years ago to avoid pollution/cost effective. But my experience is negative. Then there are not subsidy. In the broacher, it was said that the battery come for 20000 km and the cost was Rs.10,500/-. The battery was out of service at 12,725 KM. Next I bought another battery at the cost of Rs.16,500/-. It was expired at 12000 KM. I bought again the battery at the cost of Rs.18500/-. One year over,only 5000 KM over. But the battery with one charge only 35 KM. I have to pay Rs.4/- for KM., shouldHave I to take burden of Rs.4/- while Petrol vehicler only pay Rs.1-2 for KM. The government want to give incentive to vehicle seller at the time of purchase. But the burden of heavy maintenance cost by customer. If the government wants really to promote electrical vehicles ,it should give subsidy to batterys.The batteries must be charged with atleast 1 to hours, battery warranty should be atleast 2-3 years, subsidy to purchase battery, establishment of Charging stations 3-5 Kms. etc. Without proper steps, it is nothing but propaganda purpose only.

  3. pranav giri says

    I am mechanical engineer and I am created a better opposition car which is self energy generated car it is better then electric vehicle and hybrid vehicles my project patent no. 2196/MUM/2015 this car is eco-friendly.

  4. Altaf Rahman says

    The major factor that will be considered by people who want to buy Electrically driven vehicles is the time for charging. Many of them may keep it on charge once they reach home just like we do with our mobiles.
    But what about the cab drivers as rightly asked by Chetan?
    May be the answer lies in another invention. Two years back a US Student of Indian origin won a Young Scientist Award in US for her invention of a mobile Battery charger which can do it in 30 sec. The same technology should be developed for vehicle batteries and if we can achieve even 5 min, we can have Vehicle charge shops like petrol stations on the road. People with low charge, come to the shop, get charged in 5 min and go away.
    Just my two paisa :)

  5. Altaf Rahman says

    I am not interested in the finer details of how this works. I am interested in the concept.
    We all know that all the vehicles run on crude derivatives like Petrol, Diesel and in cases of some unethical Petrol Bunks on Kerosene which is mixed with Petrol/Diesel. In all cases, the fuel source is Crude oil which India imports. Now think of Electrically driven Vehicles. They are charged with electricity. This electricity comes from power plants. These power plants run on Coal which India has abundantly. By diverting oil guzzling vehicles to use electricity derived from coal, we are not only reducing India’s dependence on imported crude but giving a push to use more of the locally available coal.
    Now coming to environmental effects, we are carbon neutral. Instead of burning petrol/Diesel, we are burning coal. That’s all. However there is a minute advantage to environment. The use of vehicles is in cities where electrically charged vehicles don’t release polluting gasses. The gasses are released in Power plants which usually are in remote areas (like pithead power plants which are near to coal mines). This way though we are releasing polluting gasses, we are keeping them away from urban areas. This will have impact on quality of air in cities, overall health of people will improve by that much.

    Now how the government plans to execute the holy concept is a different question.

    Just my two paisa :)

  6. Chetan says

    Success of the project in the commercial vehicle sector hinges on the govt’s ability to provide charging points for these vehicles. The average cab driver parks his vehicles on the road. How will such people be able to charge their cars regularly?

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