Cabinet approves PM E-DRIVE scheme (FAME-III)

The Cabinet has approved the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, allocating ₹10,900 crore over two years to advance adoption of electric mobility in India.

This policy will replace the previous FAME II Scheme and aims to facilitate the adoption of 24.79 lakh electric 2-W, 3.16 lakh electric 3-W and 14,028 electric buses.

Subsidies/Demand incentives worth ₹ 3,679 crore have been provided to incentivize e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs.

Additionally, ₹4,391 crore is designated for the procurement of E-buses by state transport undertakings with preference for new buses procurement against scrapped vehicles.

Also, the scheme allocates ₹500 crore each for adoption of e-ambulances and E-trucks.

A total of ₹2,000 crore is also earmarked for the installation of 22,100 fast chargers for electric 4-W, 1,800 fast chargers for E-buses and 48,400 fast chargers for electric 2/3-W, ensuring robust infrastructure to support the growing electric vehicle market.

The scheme looks comprehensive as it addresses the need for incentives on the demand side as well as envisages requisite capex on charging infrastructure addressing the issue of range anxiety.

Continuation of Fame scheme was much awaited for further adoption of EV’s domestically. This policy is certainly positive for the E-mobility players in the 2-W,3-W and Buses segment with clear beneficiaries being Bajaj Auto & TVS Motors on the 2-W side, M&M & Bajaj Auto on the 3-W side and Tata Motors & Ashok Leyland on the E-buses space.

The subsidy for 2-W is structured at ₹ 5,000 per kilowatt hour, capped at ₹ 10,000 per vehicle, with a reduced subsidy of ₹ 2,500 per kilowatt hour in the second year. Additionally, electric three-wheelers can benefit from a ₹25,000 subsidy in the first year and ₹ 12,500 in the second year. For the L5 category (cargo three-wheelers), they will get a benefit of ₹50,000 in the first year, and for the second year, it is ₹ 25,000.