Subsidy For Electric Vehicles: Driving The Future Of Sustainable Transportation

In India, the government has been actively promoting the adoption of electric vehicles (EVs) through a series of incentives, subsidies, and tax breaks. One of the key initiatives is the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which aims to accelerate the EV industry’s growth. This blog explores how the FAME subsidy works, its different stages, state-specific incentives, and the importance of electric vehicle policy coverage for electric vehicles. **

FAME Subsidy: A Catalyst For EV Adoption

The FAME subsidy program in India was launched to provide financial support for research and development in the EV industry, promote the establishment of charging infrastructure, and encourage the adoption of EVs by government agencies and public sector projects. The scheme is divided into two stages – FAME I and FAME II.

FAME I (April 1, 2015, to March 31, 2019): This phase focused on providing financial assistance for purchasing hybrid and electric vehicles. The Demand Incentive Disbursement Mechanism (DIDM) determined subsidies based on battery and technology specifications for each vehicle category.

FAME II (April 1, 2019, onwards): Building on the success of FAME I, the second phase expanded its scope to include research and development, charging infrastructure development, and support for electric component manufacturing. Electric buses and two-, three—, and four-wheel drive vehicles became eligible for subsidies. The program has been extended until March 2024, offering a maximum incentive of ₹1.5 lakhs for an electric vehicle.

State-Specific Electric Vehicle Subsidies

Beyond the FAME subsidy, the Indian government provides additional incentives and exemptions at the state level. EV owners enjoy tax exemptions, a lower Goods and Services Tax (GST) rate of 5%, compared to the standard 18% for other vehicles, and in some states, reduced or waived road tax for electric vehicles. **

How To Apply For The FAME Electric Vehicle Subsidy

Applying for the FAME subsidy involves a straightforward process:

• Select An Eligible Electric Vehicle: By reviewing the list of qualifying vehicles, choose an electric vehicle that allows for the FAME subsidy.
• OEM Registration: Ensure that the Original Equipment Manufacturer (OEM) is registered for the FAME scheme, as only registered OEMs can provide the subsidy.
• Price Quote: Receive a price quote from the dealer that includes the deducted subsidy amount, making the cost transparent for the buyer.
• Purchase Information: After completing the transaction, the dealer shares the purchase information with the OEM.
• Monitoring Body Verification: The National Automotive Board (NAB) verifies the purchase details and confirms eligibility for the subsidy.
• Subsidy Amount Deduction: Once confirmed, the OEM credits the subsidy amount to the dealer, who deducts it from the vehicle’s price, ensuring the customer pays the adjusted cost.

Insurance For Electric Vehicle Security

Electric vehicle insurance is crucial for electric vehicles, and motor insurance providers offer customized insurance for four-wheeled electric vehicles. Comprehensive insurance for electric cars protects against mishaps, theft, and damages and provides third-party liability coverage. Timely electric vehicle insurance renewal ensures continuous protection against unforeseen risks and injuries. Claims are subject to terms and conditions set forth under the motor insurance policy. *

The government policies on electric vehicles in India, particularly the FAME subsidy, have significantly contributed to lowering the initial cost of electric vehicles, making them more accessible to the public.

* Standard T&C Apply

** Tax benefits are subject to change in prevalent tax laws.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.