New Delhi: The government has clarified that its Electric Mobility Promotion Scheme (EMPS), a demand-incentive scheme meant to act as a bridge between FAME-II and the upcoming FAME-III scheme, has limited funds, and subsidy claims will only be entertained till the scheme’s ₹500-crore outlay is exhausted, or till the scheme ends on 31 July 2024.
With a total outlay of ₹500 crore, the scheme offers incentives for electric two-wheelers and three-wheelers for up to to 333,387 e-two-wheelers and 40,828 e-three-wheelers. At present, companies have raised claims totaling ₹54.42 crore for 41,557 vehicles as on Tuesday, according to the government’s EMPS dashboard. This indicates there is significant runway left for claims to be made for the next two to four weeks, by when the new iteration of the FAME-III is expected to be introduced.
“EMPS 2024 is fund limited, with restricted number of vehicles and a term-limited Scheme, i.e., the subsidies for demand incentive are eligible for e-2w and e-3w sold and registered until the funds are available or the number of vehicles supported reaches the maximum number defined category-wise (shown in para above) or until 31 July 2024, whichever comes first. The EVs eligible for incentivization under EMPS 2024 scheme must be manufactured and registered within the validity period of EMPS-2024 certificate,” the ministry of heavy industries (MHI) said.
However, the sustainability of the EV ecosystem beyond the scheme’s duration remains a key concern.
FAME-II, which concluded on 31 March, was succeeded by EMPS that, in turn, is scheduled to expire on 31 July. The next version of FAME or FAME-III has still not received the final cabinet nod.
What experts expect
Industry executives were expecting that the MHI might announce an extension of the EMPS scheme before 31 July, with FAME-III to be announced by the middle of August.
At the same time, industry experts believe incentives in FAME-III to be lower than its earlier version. While that’s a concern for many, some like Bajaj Auto are not worried.
“Cell costs have reduced over the last year and along with other supply chain opportunities, is enabling us to price E2Ws lower,” said Rakesh Sharma, executive director, Bajaj Auto. “Tax systems and structural incentives are more long-term and help to mobilize capital to the sector.”
Sharma pointed out that subsidy in the hands of the customer is a temporary thing. It achieves a temporary outcome and distorts purchase decisions. “It makes the customer artificially lean towards a certain choice,” he said.
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Published: 23 Jul 2024, 08:30 PM IST