The Modi government is going to present the general budget on 1 February, and it will be the last budget of the current government term.
Many people expect that this budget will bring happiness to various sectors, including the electric vehicle (EV) sector.
It is anticipated that the government might announce FAME III subsidy scheme to support the EV sector and increase sales.
FAME, which stands for Faster Adoption and Manufacturing of Electric Vehicles in India, is a program where the government helps car makers by providing subsidies to produce electric vehicles in the country.
The current FAME II subsidies will end in March 2024. Electric vehicle manufacturers are hopeful that FAME III will be introduced to keep the prices of electric vehicles reasonable.
Manufacturers are worried about the availability of subsidies, as without them, the prices of electric vehicles could become much higher.
FAME II began in 2019 with a budget of Rs 10,000 crore over 5 years, but the allocation for FAME III has not been decided in the Union Budget yet.
The FAME III subsidy is crucial to prevent electric vehicle prices from becoming too high for people to afford.
For instance, the cost of batteries significantly contributes to the overall price of an electric vehicle.
The expectations are that the guidelines for FAME III will be similar to those of FAME II.
Therefore, the government will continue to encourage Original Equipment Manufacturers (OEMs) to get components from local manufacturers and produce electric vehicles in India.
The introduction of FAME III would be good news for the EV market, as several electric two-wheelers are expected to be available for sale this year, including the Ather Rizta and the updated Mitra Era.
However, it’s worth noting that last year, the government reduced the subsidy on electric two-wheelers per kilowatt, making them more expensive to purchase.
