An increasing number of people are opting for electric vehicles (EV) over petrol or diesel vehicles. This option is not only better for the environment, but is also more efficient as compared to traditional fuel-powered vehicles. Moreover, rising petrol and other fuel prices have triggered an increase in the number of customers who want to shift to electric vehicles. In India, electric vehicles are not only cost-effective, but they also have financial benefits.
Individuals who purchase EV on loan will be eligible for a tax reduction of Rs 1.5 lakh on the interest charged on the mortgage balance under this provision. There are plenty of electric vehicle models on the market, and with increased sales, some automakers are planning to introduce new models.
This article will take you through the government subsidies on electric vehicles in India.
The Indian government has been pushing for the adoption of electric vehicles (EVs) in the country. The government is not only providing various subsidies to buyers of EVs but also has announced schemes to promote the setting up of charging stations.
In a recent development, the government of India has decided to give significant subsidies on Electric Vehicles (EVs). The government is already giving an incentive of INR 9,000 on electric two-wheelers and three-wheelers, and the latest decision will further sweeten the deal.
India has taken a bold step forward by supporting the electric vehicle industry with generous incentives in an attempt to see a rise in electric vehicles manufactured and sold within the country. Electric vehicles in India are poised to become a major player while helping to shape the future of the automotive industry
The Electric Vehicles Policy of the Government of India was launched in 2017 with a vision to have at least 30% of vehicles on Indian roads as EVs by 2030. In order to achieve this, the government has been supporting the usage of EVs in the country through various means.
The most important support has been in terms of subsidies that are given to electric vehicle manufacturers and buyers. Listed below are the various subsidies on EVs given by the Government of India.
FAME Scheme
Fame India Scheme 2022 was launched keeping in mind the pollution which was happening due to the vehicles which are operated through diesel and petrol. The first phase of the scheme is already done by the concerned authorities of the Indian government. Now, phase two of the scheme was started under which the Government of India will be giving out 670 electric buses in the states of Maharashtra Goa Gujarat, and Chandigarh and it is also said that 241 charging stations will be provided in on the streets of Madhya Pradesh, Tamilnadu, Kerala, Gujarat, and Port Blair. This will help in the development of the areas with electrical vehicles.
The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme was launched in 2015 which aimed at encouraging adoption of eco-friendly vehicles by offering incentives on electric and hybrid vehicles. The scheme was extended up to March 2019 with an outlay of Rs 5,500 crore, out of which Rs 1,000 crore were reserved for two-wheelers.
However, the amount isn’t allocated based on the price or type of vehicle but the battery capacity. That means higher incentives go to buses and commercial vehicles compared to cars and two-wheelers. Under FAME, the government offers an incentive ranging from Rs 10,000 to Rs 20,000 for 2-wheelers with battery capacity less than 3 KWh, up to Rs 22,000 for 2-wheeler with battery capacity between 3 KWh and 9 KWh.
| Name of the city | Number of electric stations |
| Chandigarh | 48 |
| Delhi | 94 |
| Jaipur | 49 |
| Bengaluru | 45 |
| Ranchi | 29 |
| Lucknow | 1 |
| Goa | 17 |
| Hyderabad | 50 |
| Agra | 10 |
| Shimla | 7 |
Fame India Scheme Extended Till 2024
The Government of India has launched the FAME II scheme to promote electric mobility. It is an acronym for Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India. Through this scheme, the government is going to provide subsidies on the purchase of new electric vehicles. The government has extended the FAME II scheme for 2 years. Now, this scheme will be applicable till 31st March 2024. Previously, the scheme ran from 2019 to 31st March 2022. It aimed to set up necessary charging infrastructure for electric vehicles. The Fame India scheme launched with the objective of addressing environmental pollution and fuel depletion. Under this scheme, the government has also increased the subsidy incentives from Rs 10000 per kWh to Rs 15000 per kWh.
Sales Of Vehicle Under Fame India Scheme
As of 26 June 2021, 78045 total electric vehicles have been sold through the Fame India scheme which includes 59984 electric two-wheelers, 16499 electric three-wheelers, and 1562 electric four-wheelers. The government has allocated a budget of Rs 10000 crore for the implementation of this scheme. Only 5% of the budget amount is used till now i.e. Rs 500 Crore. In terms of sales 58613 electric two-wheelers have been sold till March 2022. The target was to sell 10 lakh units so the government has decided to extend this scheme till 2024.