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Government Launches a Scheme to Get 7M Electric Vehicles on Road by 2020

Government Launches a Scheme to Get 7M Electric Vehicles on Road by 2020

Union Minister of Heavy Industries and Public Enterprises, Anant Geete, yesterday launched Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) with an aim to promote and encourage sale of electric and hybrid vehicles. Its implementation could mean benefits and subsidies of up to 1.38 lakh per smart car.

The Government aims to bring 6-7 million (60-70 lakh) electric and hybrid vehicles on road by 2020. For which, an estimate of 14,000 crore will be required over a period of 5 years to successfully implement the scheme.

As of now, Rs 795 crore has been allocated which will be utilized under Phase 1, which has been again broken down into two 1-year period: 2015-16 and 2016-17. Out of Rs 795 crore budget, Rs 500 crore would be utilized for giving incentives alone.

The incentives and budget allocations are as follows

 Vehicle Segment  Minimum incentive `  Maximum incentive `
 2  wheeler scooter 1800 22,000
 Motorcycle 3500 29,000
 3  wheeler Auto rikshaw 3300 61,000
 4 wheeler cars 11,000 1,38,000
 LCVs 17,000 1,87,000
 Bus 30,00,000 66,00,000
 Retro Fitment Category  15 % or ` 30,000 if reduction in fuel consumption is 10-30%  30 % of Kit price` or ` 90,000 if reduction in fuel consumption is more than 30 %


To implement the Scheme to its optimum, the ministry has divided it in 4 sections

  1. Smart cities (All cities which are being currently converted into smart cities)
  2. 6 major metropolitan cities: Delhi-NCR, Greater Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad.
  3. Cities where more than 1 million citizens reside
  4. All cities of North East

The reimbursement will be directly provided to the end customer by the manufacturer, who himself will receive it from DHI (Department of Heavy Industry). However, the scheme is limited to vehicles made or assembled in India, imported electric or hybrid vehicles won’t be accounted for under this scheme.

As per rough estimates, if 6-7 million electric vehicles are able to run on Indian roads by 2020 then 9500 million litres of fuel would be saved, the value of which is Rs 62,000 crore (at the rate of Rs 64.95 / litre) according to

The official press release talks about the scheme and pilot plans to encourage the initiative by the government.

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