For some time now, electric vehicles (EV) have been hailed as the future of mobility. Eco-friendly and noise-free, these vehicles present a real and sustainable alternative to petrol-run ones.
However, their cost still poses a challenge to widespread adoption, especially in a price-sensitive market like India. Naturally, government-sponsored electric vehicle subsidy programs have become critical to paving the way for EVs in the country.
Thanks to the government’s initiatives to promote e-mobility, electric vehicles are becoming more accessible and affordable to the Indian consumer. Individual state EV policies, aimed at increasing affordability even further, provide more impetus to the shift.
Government subsidy on electric vehicles
Below are the statewise subsidies on electric vehicles as well as the discount on road tax.
State
Subsidy (Per kWh)
Maximum Subsidy
Discount on Road Tax
Andhra Pradesh
Nil
Nil
1
Assam
₹10,000
₹1,50,000
1
Bihar
₹10,000
₹1,50,000
1
Gujarat
₹10,000
₹1,50,000
0.5
Karnataka
Nil
Nil
1
Kerala
Nil
Nil
0.5
Madhya Pradesh
Nil
Nil
0.99
Meghalaya
₹4,000
₹60,000
1
Odisha
NA
₹1,00,000
1
Punjab
Nil
Nil
1
Rajasthan
Nil
Nil
NA
Tamil Nadu
Nil
Nil
1
Telangana
Nil
Nil
1
Uttar Pradesh
Nil
Nil
0.75
Maharashtra
₹5,000
₹2,50,000
1
West Bengal
₹10,000
₹1,50,000
1
What is a FAMEelectric vehicle subsidy?
FAME, or Faster Adoption and Manufacturing of (Hybrid and) Electric Automobiles in India, is an incentive programme for government subsidy on electric vehicles. The EV incentive programme was presented in 2013 as part of the National Mission on Electric Mobility 2011/National Electric Mobility Mission Plan 2020. The following are the main aspects of the subsidy –
The FAME I scheme’s first phase was approved for a two-year period, beginning April 1, 2015.
Since then, the EV subsidy programme has been periodically extended. The first phase of FAME was last extended to March 31, 2019.
The Demand Incentive Disbursement Mechanism (DIDM) is used in the FAME scheme.
The amount of government subsidy on electric vehicles for each vehicle category (pure electric, hybrid, etc.) has already been established based on technology and battery parameters.
What is the FAME II (FAME 2) subsidy for electric vehicles?
FAME II is the electric vehicle incentive programme’s second phase, which went live on April 1, 2019. Beginning April 2019, the government launched a three-year incentive programme with a budget of Rs. 10,000 crores. The highlights of FAME II are listed below:
The FAME II e vehicle subsidy is expected to cover 7,000 e-buses, 5 lakh electric 3-wheelers, 55,000 electric vehicles, and 10 lakh electric two-wheelers.
The EV subsidy programme has been extended till March 2024.
Increased subsidy for electric vehicles (two-wheelers) is one of the primary attractions of the new FAME II scheme.
The incentive for two-wheeler EVs was initially set at Rs. 10,000 per kWh. It has now been increased by 50% to Rs. 15,000 per kWh.
Additionally, the e-vehicle subsidy cap has been raised from 20% to 40% of the vehicle’s cost.
The subsidy for electric vehicles (four-wheelers) stays unchanged at Rs. 10,000 per kWh.
For an electric car, the maximum incentive value is Rs. 1.5 lakhs.
FAME II’s Requirements
The FAME 2 electric vehicle subsidy is available for electric cars and two-wheelers. While purchasing an EV, you should be aware of the specifics of the subsidies programme.
The incentive is available for electric automobiles and SUVs, with ex-factory price being limited to Rs. 15 lakhs. EV four-wheelers that cost more than Rs. 15 lakhs are, therefore, ineligible for the incentive.
The system requires a minimum range of 80 kilometers and a top speed of 40 kilometers per hour for battery-powered two-wheelers.
The FAME II e vehicle subsidy scheme is available for electric two-wheelers that cost less than Rs. 1.5 lakhs.
The following state’s policies do not include a direct subsidy for electric cars and SUVs-
Andhra Pradesh
Karnataka
Madhya Pradesh
Punjab
Rajasthan
Tamil Nadu
Telangana
Uttarakhand
Uttar Pradesh
In most states implementing the subsidy policy, the road tax for electric four-wheelers is completely exempted, with the exception of Kerala, Gujarat, and Uttar Pradesh. In Kerala and Gujarat, buyers are required to pay 50% of the whole road tax amount. In Uttar Pradesh, buyers must pay 70% of the total road tax.
In the meantime, registration fees for all kinds of EVs are waived countrywide. The Ministry of Road Transport and Highways (MoRTH) announced last August that all battery-powered vehicles are exempt from fees for issuing or renewing registration certificates.
Top EV-friendly States that Offer Best Incentives to Buyers
As every Indian state frames its EV policy in alignment with the FAME subsidy scheme, the incentive or electric car subsidy will vary from state to state. Here are a few states that offer the best EV subsidy to buyers-
Gujarat
Two-wheeler: Maximum up to Rs. 20,000
Three-wheeler: Benefits up to Rs. 50,000
Four-wheeler: Maximum up to Rs. 1.5 lakh
Maharashtra
Two-wheeler: Maximum up to Rs. 25,000
Three-wheeler: Benefits up to Rs. 30,000
Four-wheeler: Maximum up to Rs. 2.5 lakh
Meghalaya
Two-wheeler: Maximum up to Rs. 20,000
Three-wheeler: NA
Four-wheeler: Maximum up to Rs. 60,000
Karnataka
Besides the FAME EV subsidy, Karnataka doesn’t extend any direct incentives to EV buyers. But it gives electric car subsidy to EV makers.
Andhra Pradesh
Andhra Pradesh also doesn’t directly offer electric car subsidy to buyers but it offers them an exemption from registration charges and road tax.
Telangana
Telangana offers EV buyers complete exemption from registration charges and road tax besides the FAME incentive.
Tamil Nadu
Tamil Nadu offers a 100% road tax waiver and zero registration charges for EV buyers. However, the state government is looking to reconsider its EV policy.
Kerala
EV buyers in Kerala can get a 50% discount on road tax for the first five years. The state also gives a subsidy to e-rickshaws ranging from 10,000 to 30,000.
Over to you
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1. What is the amount of the subsidy I receive for buying an environmentally friendly car?
Under the FAME scheme, you can receive a subsidy of up to ₹10,000 per kWh for electric vehicles. This subsidy helps reduce the upfront cost of buying environmentally friendly cars.
2. What is the Fame 3 subsidy?
FAME 3 is the third phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme in India. It provides enhanced incentives for electric vehicle buyers and supports the development of charging infrastructure to promote EV adoption.
3. What is the tax rebate for EV in India?
In India, you can avail a tax rebate of up to ₹1.5 lakh under Section 80EEB for purchasing electric vehicles. This rebate helps lower your overall cost and encourages more people to switch to electric cars and bikes.
4. Are e-rickshaws eligible to receive EV subsidies?
Yes, e-rickshaws are eligible for EV subsidies in India. If the cost of the e-rickshaw is below ₹5 lakh, you can receive incentives, which is a cost-effective and sustainable choice for your transportation needs.
18 November 2024
5 mins read
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