ANALYSIS OF FAME
FAME SCHEME AND ITS
OBJECTIVES
FAME: Faster Adoption and Manufacturing of Hybrid & Electric Vehicles
Launched in 2015 under National Electric Mobility Mission Plan (NEMMP) 2020
Currently in its second phase (FAME-II), from April 2019 to March 2024
Key Objectives
Accelerate EV adoption
Establish necessary charging infrastructure
Reduce transportation sector's environmental impact
Support Indian EV manufacturing ecosystem
FAME II
scenario 1
FAME II
scenario 2
FAME II
scenario 3
FAME II FAME II
FAME II
COST
BENEFIT
scenario 1 scenario 2
Integrated (Subsidy (Subsidy (Subsidy scenario 3
(Subsidy (Subsidy
CBA 50%, 100%, 100%, Integrated CBA (Subsidy 100%,
ANALYSIS
50%, 100%,
contributi contributi contributi contribution
contributio contribution
on 40%) on 40%) on 35%) 35%)
n 40%) 40%)
Investmen
t and costs Total benefit and
539.07 1,078.34 1,408.59 747.71 1495.33 1953.1
(INR avoided cost
billion)
Income generation from
Subsidies for
EV-related employment
3.43 6.85 8.95
39.63 79.26 79.26
EVs
Investment Investment cost of
cost of EVs 453.14 906.27 1,207.96 599.11 1,198.23 1,565.03
ICE vehicles
after subsidies
Investment Air pollution 21.29 42.57 55.60
cost of EV 8.54 17.08 22.30
chargers
CO2 emissions 7.35 14.70 19.20
O&M costs 30.91 61.82 80.74
Investment
cost of power 5.17 10.55 13.92 Fuel use 115.97 231.87 302.87
generation
O&M costs of Noise pollution 0.56 1.11 1.45
power 1.69 3.37 4.40
generation
PLI (Production Linked FAME-II (Faster Adoption and Manufacturing of Hybrid & Electric
Aspect
Incentive) Vehicles)
Boost domestic
manufacturing of Advanced
Primary Objective Accelerate adoption of electric and hybrid vehicles
Automotive Technology (AAT)
products
Budget Allocation ₹25,938 crore ($3.5 billion) ₹10,000 crore ($1.4 billion)
5 years (FY 2022-23 to FY
Duration Initially 3 years (2019-2022), extended to 2024
2026-27)
New Non-Automotive
Beneficiaries EV manufacturers/conusmers
Investor companies
4-18% incentives on
Incentive Structure incremental sales of AAT E-2W: ₹15,000 per kWh (max 40% of cost)
products
Wide range of AAT including
EVs, fuel cell vehicles, Specifically focused on electric and hybrid vehicles (e-2W, e-3W, e-4W, e-
Scope
hydrogen storage, buses)
autonomous vehicles
Minimum 50% domestic value For e-2W and e-3W: 50% localization
Localization Requirements
addition within 5 years For e-4W: 60% localization within 2 years of scheme notification
Minimum ₹2,000 crore for
OEMs, ₹500 crore for
Investment Requirements No direct investment requirements
component manufacturers
over 5 years
Aims to create robust supply Indirectly impacts supply chain through demand creation and localization
Supply Chain Impact
chain for AAT in India requirements
LIMITATIONS
1. LOCALIZATION NORMS: A DOUBLE-EDGED SWORD
2. CHARGING INFRASTRUCTURE: THE MISSING LINK
3. RESEARCH AND DEVELOPMENT: THE OVERLOOKED PILLAR
4. IMBALANCED FOCUS ON VEHICLE SEGMENTS
5. POLICY VOLATILITY
RECOMMENDATIONS
Enhance Charging Infrastructure Support
Increase budget allocation for charging infrastructure to at least 20-25% of total funds
Introduce separate incentives for setting up fast-charging stations
Collaborate with state governments to streamline land allocation for charging stations
Expand Vehicle Coverage
Include incentives for electrification of commercial vehicles, tractors, and other agricultural equipment
Introduce a separate category for premium electric vehicles with a different incentive structure
Flexible Localization Norms
Implement a phased approach to localization requirements
Provide additional incentives for achieving higher levels of localization rather than penalties for non-compliance
Boost R&D Initiatives
Allocate at least 10% of the total budget for R&D activities
Offer additional incentives for companies investing in EV-related R&D in India
Streamline Subsidy Disbursement
Implement an automated, real-time subsidy disbursement system
Consider direct benefit transfer to consumers rather than routing through manufacturers
Support Battery Swapping
Introduce specific incentives for setting up battery swapping stations
Develop standardization norms for swappable batteries
THANK
YOU
