Govt withdraws sops to conventional battery vehicles under FAME

The government Thursday extended the first phase of the FAME-India scheme for promoting electric and hybrid vehicles by another six months till March 31, 2019 but has withdrawn benefits available to conventional battery vehicles.

As per a notification by Heavy Industries Ministry, the incentives under the extended scheme from October 1 will be available only for registered vehicles.

Until now, electric two-wheelers and three-wheelers powered by conventional lead-acid batteries were eligible for incentives under FAME-I. However, these vehicles will no longer be able to avail sops from October 1.

According to sources, the launch of FAME II, which was to take place on September 7, has been delayed as the prime minister's office (PMO) has sought reworking of the proposal to offer incentives of around Rs 5,500 crore.

Officials said the PMO is in favour of utilising most of the funds to encourage local manufacturing of lithium-ion batteries, which form the core of electric vehicles, as India presently imports these batteries from China.

It has been decided that the period of the FAME-India scheme be further extended for a further period of six months up to March 31, 2019 or till notification of FAME-II, whichever is earlier, the ministry said.

It said the benefits of incentives available to conventional battery vehicles stand discontinued with effect from October 1.

"Incentives in the remaining period of the scheme shall only be available for registered vehicles. Henceforth, with effect from October 1, 2018, vehicles not requiring registration shall be excluded from the scope of the scheme irrespective of the type of battery," it said.

The phase I of the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME-India) scheme was supposed to be implemented over a two-year period commencing from April 1, 2015. It was to be followed by the rollout of the second phase.

However, the first phase was extended thrice for six months each earlier and has now been further extended till March 2019 or till notification of the second phase.