Centre announces new scheme to subsidise electric two and three wheelers

The centre on Wednesday announced a new scheme to promote sale of electric two and three wheelers the country. According to Heavy Industries Minister Mahendra Nath Pandey, Rs 500 crore is being allocated for the Electric Mobility Promotion Scheme (EMPS), 2024. This scheme is valid for four months from April 1 onwards.

“We are committed to the growth of electric vehicles in the country and will keep encouraging their sales,” he said while announcing the scheme.

This new initiative replaces the ongoing Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME II) scheme which lapses on March 31, 2024. “Companies will need to register under the new programme to be eligible for getting subsidies,” a senior government official told ET that existing registration under FAME II scheme will not be valid for the coming programme. The window for fresh registrations opens from April 1 onwards. There are presently 192 electric vehicle (EV) models being subsidised under FAME II which is focused on supporting sale of locally made products.

EMPS 2024 offers a subsidy on EVs of up to Rs 10,000 per two-wheeler, Rs 25,000 per light three-wheeler (like e-rickshaws), and Rs 50,000 per heavy three-wheeler (like autos and commercial units).

Category of electric vehicle	Subsidy cap per unit (in Rs)
Two-wheeler	10,000
Light three-wheeler (e-rickshaw)	25,000
Heavy three-wheeler (auto or commercial)	50,000

The new scheme allocates Rs 333.39 crore to support sale of 3.33 lakh electric two-wheelers (e-2W) and Rs 126.19 crore for sale of 25,238 large electric three-wheelers (e-3W L5). Sale of 13,590 e-rickshaw type electric three-wheelers (e-3W) is to be supported through the Rs 33.97 crore allocation under the EMPS, 2024.

EMPS 2024 lowers the subsidy on e2w and e3w and completely omits electric buses and four wheelers. Responding to a query on the same, the official quoted above said, “A third iteration of the FAME scheme (FAME III) will be announced after polls to cover more categories. Registrations made under the EMPS 2024 will be valid for the new scheme as well,” indicating that EMPS 2024 is a precursor to a wider scheme for supporting EV sales in India.

Launched in 2019, FAME II has so far subsidised sales of nearly 1.3 million two-wheelers, 150,613 three-wheelers, and 18,794 four-wheelers. Over Rs 6,163 crore has been disbursed under the FAME II scheme which was initially launched for three years but later extended to five, ending in 2024.