In a significant step towards promoting electric mobility in India, Union Heavy Industries Minister Mr. H D Kumaraswamy recently announced that the government is in the final stages of rolling out the third phase of its flagship FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme. This new phase, dubbed FAME 3, is expected to be finalized and launched within the next 1-2 months. The government is carefully reviewing inputs from the first two phases, FAME 1 and FAME 2, to ensure that any gaps are addressed effectively. FAME 3 will replace the Electric Mobility Promotion Scheme (EMPS) 2024, a temporary measure which expires in September.

FAME 3 is part of India's ongoing efforts to accelerate the adoption of electric vehicles (EVs), reduce carbon emissions, and support the growth of the country’s EV manufacturing sector. The inter-ministerial group currently reviewing the new phase is taking into account feedback and suggestions from key stakeholders, including the Prime Minister’s Office (PMO), to ensure the scheme is comprehensive and aligned with India’s sustainable development goals.

A Look Back at FAME 2

The second phase of the FAME scheme, launched in 2019, had a substantial outlay of Rs. 10,000 crore (US$ 1.19 billion). Initially planned for a three-year period, FAME 2 was later extended until March 2024 with an additional allocation of Rs. 1,500 crore (US$ 178.7 billion). The primary objective of FAME 2 was to support the adoption of 1 million electric two-wheelers, 500,000 electric three-wheelers, 55,000 passenger electric cars, and 7,000 electric buses.

This phase made significant progress in popularizing electric vehicles across various segments. However, the government has identified certain gaps and challenges that need to be addressed in the upcoming phase. These include issues related to infrastructure, charging networks, and the adoption of commercial electric vehicles. Additionally, the government is working on strategies to assist automobile dealers in managing unsold inventory of electric vehicles, a challenge that has emerged as manufacturers and dealers work to align supply with growing demand.

Key Features of FAME 3

As India gears up for the launch of FAME 3, several key areas are expected to be addressed in the new phase. First, the scheme will continue to promote the adoption of electric vehicles, with a focus on further expanding the EV infrastructure, including the establishment of charging stations across the country. Ensuring wider access to charging networks will play a crucial role in increasing the uptake of electric vehicles, especially in Tier-II and Tier-III cities, where infrastructure development has been relatively slower.

Moreover, FAME 3 will likely aim to support advanced electric vehicle technologies and enhance manufacturing capabilities within the country. The government recognizes the importance of developing local manufacturing ecosystems to reduce reliance on imports and position India as a global hub for electric vehicle production.

The scheme will also incorporate sustainability measures that address the environmental impact of vehicle production and use. This aligns with India’s broader climate goals, including its commitment to reducing carbon emissions and achieving net-zero targets in the coming decades.

Additionally, FAME 3 is expected to include provisions for commercial vehicles, with the potential to revolutionize the electric bus and fleet vehicle markets. These sectors are critical for reducing emissions in the public transportation and logistics industries, which are major contributors to air pollution in urban areas.

Government’s Commitment to EV Adoption

Mr. Kumaraswamy emphasized that the Prime Minister’s Office is actively involved in the development of FAME 3, reflecting the importance of electric mobility in the government’s broader sustainability agenda. The scheme will be presented to the Union Cabinet for approval once all the necessary adjustments and recommendations have been integrated.

The minister also touched upon the challenges faced by the automobile industry, particularly in managing unsold EV inventory. He assured stakeholders that the government is working on strategies to support the industry, with a focus on ensuring sustainable growth and fostering collaboration between the public and private sectors.

FAME 1 and FAME 2: Successes and Learnings

The success of FAME 1 and FAME 2 in boosting electric vehicle adoption has paved the way for the next phase of India’s EV revolution. However, the government has also identified areas that require improvement, such as the deployment of charging infrastructure and the need to increase the availability of affordable electric vehicles for the mass market.

One of the major learnings from FAME 2 was the need to better align policy frameworks with the evolving market dynamics in the electric vehicle sector. This includes ensuring that manufacturers are adequately supported in scaling up production and that consumers have access to incentives that make electric vehicles more competitive with traditional internal combustion engine (ICE) vehicles.

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Future Outlook for India’s Electric Mobility Sector

India is at a critical juncture in its journey towards electrification and sustainable transportation. With the impending launch of FAME 3, the government is signaling its strong commitment to making electric mobility a cornerstone of its environmental and economic policies. The success of the electric vehicle sector will depend on continued collaboration between the government, manufacturers, and consumers, as well as the creation of a robust EV ecosystem that includes charging infrastructure, financing options, and affordable electric vehicle models.

The rollout of FAME 3 is expected to accelerate the adoption of electric vehicles, create new economic opportunities in clean technology, and help India meet its climate targets. As the country moves towards a greener future, electric mobility will play a crucial role in reducing carbon emissions, improving air quality, and enhancing energy security.

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