FAME III EV Subsidy Policy Coming Soon: 3 Things You Need To Know

The new policy might not provide any incentives on electric cars but reports suggest there could be hope for strong hybrids

The next generation of the Fame (Faster Adoption and Manufacturing of Electric Vehicles) policy, FAME III, is under proposal and is expected to be implemented in July. To make EVs more popular and more accessible in India, the FAME II policy provided many incentives till it ended in March 2024, and the FAME III policy is expected to do the same, with some changes.

Continued Incentive For Smaller EVs

The biggest chunk of EV adoption by numbers is not in cars, but in vehicles with fewer wheels and those meant for public use. Smaller EVs like electric two-wheelers and electric three-wheelers are expected to get the same incentives in FAME III as before. As part of the Fame II policy, electric scooters (two-wheelers) were given a subsidy of 15 percent on the price. Government provided incentives of up to Rs 22,500 on electric two-wheelers, and up to Rs 1,11,505 for electric three-wheelers. Incentives for electric buses are also expected to be carried forward.

• Upcoming Cars In India

No Incentive For Electric Cars?

This is still under discussion, and will likely be true that the new FAME policy will not include electric cars, for both private and commercial purposes. Under the Phase-I FAME policy, electric cars priced under Rs 15 lakh (ex-showroom) were given subsidies, making them more accessible. But private electric vehicles were not covered by FAME II and this might be the case with the new provisions as well. Instead, the government may focus on including strong hybrid cars only under the new FAME policy. 

• Electric Cars In India

Hybrids Over EVs

Hybrid cars, specifically strong hybrids, have been gaining popularity in the Indian market even without any government support. While there aren’t many options available in the market, they still prove to be a viable option to switch from petrol/diesel vehicles before the predicted mandate of an EV-only future. Under the new FAME policy, strong hybrid cars may become eligible for incentives if they fall under the same Rs 15 lakh budget as prescribed for EVs under FAME I.

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However, as of now, there are no strong hybrid cars under that price. The most affordable strong hybrid in India, the Toyota Urban Cruiser Hyryder, starts from Rs 16.66 lakh (ex-showroom). While this move may seem redundant, it might just pave the way for carmakers to make more affordable strong hybrid cars, and allow customers to benefit from the incentives placed by FAME III.

Also Read: Suzuki eWX Electric Hatchback Patented In India–Could It Be A Maruti Wagon R EV?

Reminder, these are simply our expectations from the upcoming FAME III policy which is still at a proposal stage only. Whether private electric cars will be included or not is still up for debate and more information is expected soon. For more information on FAME III, stay tuned to CarDekho.