New Delhi: The government is considering tweaking the allocation of funds under its electric vehicle subsidy scheme to focus more on replacing diesel buses in public transport, amid allegations that many electric two-wheeler makers had wrongfully claimed incentives.
It is looking at the option of increasing the utilisation of resources earmarked under the FAME II (Faster Adoption and Manufacturing of Electric Vehicles) scheme for electrifying buses, government sources told ET. “There is keenness that we bring on road more electric buses as this is an area of highest impact, socially and environmentally,” said a senior official.
‘Move will Help Cut Fuel Bills’
“It will not only help reduce vehicular pollution but cut drastically our fuel bills,” said the official on the condition of anonymity.
The move comes even as investigations are underway against a dozen electric two-wheeler makers for alleged violations of the local value-addition criteria under the scheme. Ather, Ola, TVS Motor and Vida are separately under the scanner for alleged mispricing of their electric vehicles to become eligible for subsidy under the scheme.
“The objective of FAME II is to incentivise shared mobility operators to transition to electric. That is why we did not extend subsidies to private car buyers under the scheme,” said a second official. “The aim is to implement the scheme in such a manner that ordinary people benefit the most.”
The government had earmarked ₹10,000 crore under the second phase of the FAME India initiative to incentivise the purchase of 7,000 buses, 55,000 passenger cars, half a million three-wheelers and one million two-wheelers with electric powertrains. The second official said the government has achieved nearly 80% of the target for electrification in the two-wheeler segment and proposals are now being studied to utilise the remaining allocation to the segment to promote electrification of buses.
The government had nearly doubled the allocation for FAME II in the budget for the next fiscal year to ₹5,172 crore.
Under FAME II, launched in 2019, it has so far spent ₹3,889.94 crore.
“Under FAME II, allocations were made as per sales targeted in different vehicle categories. The programme implementation committee can alter these caps. We have already sold 770,000 electric two-wheelers against the target of one million under FAME II. While we will not carry out wholesale changes, some tweaks can be done. We are looking into it,” the official added.
The Centre is seeking to replace up to 30,000 diesel-run buses with electric powertrain vehicles in the next 2-3 years, marking India’s giant leap toward clean mobility. In January, government-run Convergence Energy Services Ltd floated a tender to procure 4,675 electric buses under the National Electric Bus Programme. The tender is valued at about ₹5,000 crore and is in addition to two tenders, for 5,450 and 6,465 e-buses, concluded last year. The subsidy allocated to support electrification of buses was exhausted in the first tender itself.
Meanwhile, the government has stalled subsidy disbursal of more than ₹1,100 crore under the flagship scheme to a dozen two-wheeler manufacturers at the start of the ongoing financial year. It stopped releasing payments in April 2022. The government provides an incentive of ₹15,000 per kWh on electric two-wheelers, capped at 40% of the total vehicle cost, provided they meet specified localisation criteria. The incentive is accounted for in the retail price of the vehicles and the government reimburses the manufacturers within 45-90 days on the submission of proof of sale.
Anonymous emails sent to government departments and media organisations earlier this fiscal year alleged that some electric two-wheeler makers were not adhering to these localisation guidelines and using imported components, mostly from China, despite their assertions to the contrary when claiming subsidies. The EV industry association has claimed that “vested interest groups” were trying to scuttle the government’s e-mobility policy through an anonymous campaign.
Also Read:
The government is separately probing a dozen other electric two-wheeler manufacturers for their alleged failure to meet localisation commitments under the scheme.
