Economic Survey 2024: Nearly 9 Lakh EVs Got FAME-II Subsidy In FY24 Even As FAME-III Is Awaited

A subsidy to accelerate adoption of electric vehicles in India saw highest uptake in the final year of the scheme, even as the industry lobbied for more.

As many as 8.95 lakh EVs received subsidy under the FAME-II scheme in the fiscal ended March 31, 2024, according to the Economic Survey 2024 released by the government on Monday. That includes 8.04 lakh electric two-wheelers, 76,200 electric three-wheelers, and 12,400 electric cars.

Approved for five fiscal years through FY24, the second phase of the government-backed ‘Faster Adoption and Manufacturing of (Hybrid) Electric Vehicles in India’ had a total outlay of Rs 11,500 crore until March 31, 2024. The scheme was extended for four months under the Electric Mobility Promotion Scheme 2024 with a budgetary outlay of Rs 500 crore.

In all, the FAME-II scheme has subsidised 13,21,800 EVs in FY20-24.

To be sure, the industry has been lobbying for a FAME-III scheme, but it’s unlikely to be announced in the Union Budget 2024-25, according to Heavy Industries Minister HD Kumaraswamy.

“The preparatory work is still going on, and all seven ministries involved have recommended how to implement it,” Kumaraswamy had said in New Delhi on 16 July. “In the future days, we’ll see it implemented.”

According to the Economic Survey 2024, India’s automobile industry has recovered from its pandemic lows, so much so that it’s now the world’s third largest—overtaking Japan. 

But the growth is skewed.

“While passenger vehicles quickly recovered, the recovery period for two-wheelers, three-wheelers, and commercial vehicles is longer,” according to the Economic Survey 2024. In FY24, the country produced approximately 49 lakh passenger vehicles, 9.9 lakh three-wheelers, 214.7 lakh two-wheelers and 10.7 lakh commercial vehicles, it said.

The pandemic impact was seen in the auto components industry as well.

The growth in domestic production and consumption of automotive parts moderated during FY20 to FY23, compared to the previous five years, the Economic Survey 2024 said.

“The production of auto components depends on the dynamics of the domestic and export markets. The pandemic affected the automobile sector considerably, which weakened the demand for automotive parts, and, hence, their pace of expansion," it said.