To address uncertainties surrounding electric vehicle subsidies, the Ministry of Heavy Industries has introduced the Electric Mobility Promotion Scheme 2024. This scheme, with a total allocation of Rs 500 crore, will run for four months from April 1 to July 31.
Ensuring continued incentives for electric two and three-wheelers post the conclusion of the second phase of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme on March 31, the new scheme targets commercial registrations primarily. Additionally, privately or corporate-owned electric two-wheelers will also be eligible.
The Electric Mobility Promotion Scheme aims to support 3.72 lakh electric vehicles, including 3.33 lakh two-wheelers and 38,828 three-wheelers, comprising rickshaws, e-carts, and electric three-wheelers in the L5 category.
Under the new scheme, electric two-wheelers will receive a subsidy of Rs 5,000 per kilowatt-hour (kWh) with a maximum cap of Rs 10,000 per vehicle. Rickshaws and carts will also benefit from a subsidy of Rs 5,000 per kWh, capped at Rs 25,000 per vehicle. Electric three-wheelers in the L5 category will receive a subsidy of Rs 5,000 per kWh, up to Rs 50,000 per vehicle.
Subsidies have played a pivotal role in driving the initial adoption of electric vehicles, particularly in the two and three-wheeler segments. With the impending expiration of the FAME II scheme, industry stakeholders sought clarity on subsidy timelines to guide their product development, production, and sales strategies.
Minister Mahendra Nath Pandey reaffirmed the government’s commitment to electric mobility with the launch of the Rs 500 crore scheme, emphasizing its support for the electric vehicle sector across all levels.
Notably, the Electric Mobility Promotion Scheme is described as a “fund-limited scheme,” and currently excludes electric buses and four-wheelers. However, an extension of scheme coverage or the introduction of the third phase of FAME is anticipated when the government presents the full budget for the fiscal year 2025 in July.