According to Tata Motors Executive Director Girish Wagh, government support for electric and zero-emission vehicles, like FAME II, must be maintained until the entry of such vehicles reaches a certain threshold with a high level of localization.
There is also a situation to evaluate extending the FAME II scheme, which will expire next year, and allowing larger electric buses to receive subsidies.
The government has done a terrific job to promote, or more than promote, I would say, ignite electric vehicle or zero emission vehicle demand. Whether it is FAME phase I, phase II, now PLI and state-level incentives, a lot of policy measures, the government has really done a terrific job,
So, our expectation would be that the government continues with this till the electric vehicle penetration crosses a particular threshold where there is a good level of localization. Once you have a particular threshold on the road, the anxiety issues of the customers at large also will get addressed, and then I think it will be on its own
Girish Wagh, Executive Director of Tata Motors stated on the expectations from the upcoming Union budget
Extension of FAME II
I can speak only for my industry. So, yes, I think for buses, it is going to be very important, and currently, I think it is also limited to the smaller vehicles,
If they are included in the FAME, then even there, we can start seeing penetration or at least a seeding of electric vehicles
Girish Wagh stated on the extension of FAME II
He added that there is probably a need to look at other classifications of goods-carrying vehicles that are not covered by the system, such as the moderate category in the 19-20 tonne range.
Wagh suggested that the government consult with the industry and consider whether it makes sense to incorporate these vehicles in the FAME II scheme for subsidy.
In 2021, the government extended the Rs 10,000-crore FAME II scheme, which promotes electric mobility, by two years until March 31, 2024.
Government financial assistance in the FAME scheme
The first stage of the FAME scheme was started in April 2015 for two years at the cost of Rs 795 crore. It was then prolonged until March 31, 2019, with an increased expenditure of Rs 895 crore.
The second stage began on April 1, 2019, and will last three years, with a total investment of Rs 10,000 crore.
Wagh stated that the overall assumption from the Budget would be the government’s additional growth in infrastructure development because it has a compounding impact, resulting in fundamental improvement in demand.
