The Electric Mobility Promotion Scheme 2024 has a budget of Rs 500 crore and will last four months, from April 1 to July 31.
Addressing the uncertainties surrounding the future of electric vehicle subsidies, the Ministry of Heavy Industries has introduced a new initiative called the Electric Mobility Promotion Scheme 2024. This scheme is designed to extend subsidies for electric two—and three-wheelers, with a total budget allocation of Rs 500 crore. The scheme will be operational for four months, starting on April 1 and ending on July 31, 2024.
Under the new scheme, electric two-wheelers will receive a subsidy of Rs 5,000 per kilowatt-hour (kWh), with a maximum limit of Rs 10,000 per vehicle. The total budget for this segment is Rs 333.39 crore. Rickshaws and carts will also get a subsidy of Rs 5,000 per kWh but with a higher cap of Rs 25,000 per vehicle and a total budget allocation of Rs 33.97 crore. For L5 electric three-wheelers, the subsidy is set at Rs 5,000 per kWh, with a maximum limit of Rs 50,000 per vehicle and a total budget of Rs 126.19 crore.
The Electric Mobility Promotion Scheme 2024 is a successor to the second phase of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme, which is set to expire on March 31, 2024. The FAME II scheme, launched in 2019, originally had a three-year tenure with a budget of Rs 10,000 crore, which was extended to March 2024. Additionally, the budget for FAME II was increased by Rs 1,500 crore last month. The government had announced that the subsidies under FAME II would apply for vehicles sold until March 31, 2024, or until the allocated funds were exhausted, whichever came first. So far, FAME II has provided subsidies for approximately 1.47 million electric vehicles, including 1.30 million two-wheelers, 150,613 three-wheelers, and 18,794 four-wheelers.
The new Electric Mobility Promotion Scheme promotes affordable and eco-friendly public transportation options. It primarily targets electric two and three-wheelers registered for commercial purposes, but privately or corporately owned registered electric two-wheelers are also eligible for subsidies under this scheme. The scheme aims to support around 3.72 lakh electric vehicles, which includes 3.33 lakh two-wheelers and 38,828 three-wheelers. Among the targeted three-wheelers are 13,590 rickshaws and e-carts and 25,238 electric three-wheelers in the L5 category.
Subsidies have been crucial in introducing electric vehicles in India, especially for two and three-wheelers. The industry has been concerned about continuing these incentives as the FAME II scheme nears its end. Original equipment manufacturers, especially newer ones, and industry associations have been advocating for clarity and predictability regarding the duration of subsidies, as their product development, production, and sales strategies depend on this information.
Launching the Electric Mobility Promotion Scheme 2024 with a budget of Rs 500 crore, the Ministry of Heavy Industries reaffirms its commitment to electric mobility and ongoing support for the electric vehicle sector at all levels. Heavy Industries Minister Mahendra Nath Pandey emphasized this commitment while announcing the new scheme.
It’s important to note that the Electric Mobility Promotion Scheme is fund-limited and currently does not cover electric buses and four-wheelers. The newly formed government will present the full budget for the financial year 2025 in July, which could extend the scheme’s coverage or introduce a third phase of the FAME scheme.
