FAME 3 likely to be rolled out soon with Rs 10,000 crore outlay

The third edition of the Modi government's flagship electric vehicle incentive scheme FAME (Faster Adoption and Manufacturing of Electric Vehicles) with an outlay of about Rs 10,000 crore is likely to be rolled out within the first 100 days of the new government taking charge next month, a senior official said.

The scheme will offer financial incentives to electric two-wheelers and three-wheelers as well as government-owned buses, the official told ET.

However, a final decision on whether to include electric cars, including for institutional buyers such as taxi aggregators, in the FAME 3 scheme is yet to be taken, the official added.


“The proposed scheme mirrors the FAME 2 which lapsed in March 2024. It will be sent for approval to the Union cabinet shortly after the new government takes charge in June,” the official said. FAME 2 had offered a 15% subsidy on the sale price of electric scooters sold in the country.

FAME 3 will take forward the Electric Mobility Promotion Scheme (EMPS), which was introduced when FAME 2 ended on March 31, as a temporary plan till the general elections were over. With a total allocation of Rs 500 crore, EMPS is aimed at supporting sales of electric two-wheelers and three-wheelers for four months till July.

The FAME scheme was launched to encourage local manufacturing and sales of electric vehicles by extending demand incentives to end customers.

“Since it (FAME-3) will be a new scheme, all companies seeking incentives on sale of electric vehicles would have to apply for fresh certification," the official said.

According to the proposal being considered, FAME 3 is initially expected to be valid for sales made over a two-year period instead of five years under FAME 2.

The government had incentivised purchase of 7,000 electric buses under FAME 2. The new scheme is likely to increase the number of electric buses subsidised for purchase by State Transport Undertakings (STUs).

FAME 3, however, is likely to keep out of its scope subsidies for electric cars, even for commercial operations.

"Deliberations are underway on whether electric cars need any subsidy in the country," the official cited above said, adding the current proposal for FAME 3 suggests offering incentives for electric cars priced at less than Rs 15 lakh, similar to FAME 2.

Hybrid cars may also get support under FAME 3, subject to adhering to the price cap, if passenger cars are included in the scheme.

“The government is also bringing in fresh guidelines in the new scheme and companies seeking to avail benefits would have to seek re-certification," a second official said.

Under EMPS, the government extends incentives of up to Rs 10,000 per electric two-wheeler (down from Rs 22,500 in FAME 2), and up to Rs 50,000 per electric three-wheeler (down from Rs 111,505). Both categories get incentives of Rs 5,000 per kilowatt-hour (kWh).

EMPS is aimed at supporting sales of 372,215 EVs including electric two-wheelers (3,33,387) and three-wheelers (38,828). To encourage adoption of latest technologies, incentive benefits are being given to only vehicles fitted with advanced batteries.