The government has not allocated funds for the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme in the Union Budget 2025, indicating a shift in EV policy and its gradual phase-out. Instead, Rs 4,000 crore has been allocated to the newly introduced PM Electric Drive Revolution In Innovative Vehicle Enhancement (PM E-DRIVE) Scheme.
Last year, the FAME scheme had received Rs 2,058 crore, down from Rs 3,921 crore the year before, indicating a gradual phasing out of the programme, according to the expenditure budget document published during the Union Budget presentation on February 1.
The scheme launched to accelerate EV adoption in India through subsidies and incentives, played a crucial role in boosting the country’s electric mobility ecosystem.
What is PM E-Drive?
The Union Cabinet, on September 11, approved the PM E-Drive Scheme with an outlay of Rs 10,900 crore for two years with an aim to boost adoption of electric vehicles (EVs) in India. The new scheme offers subsidies worth Rs 3,679 crore to incentivise adoption of battery-driven two and three-wheelers, ambulances, trucks and other emerging electric vehicles (EVs).
Under the PM Electric Drive Revolution In Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, 100 percent support will be given for charging infrastructure at 88,500 sites, Information and Broadcasting Minister Ashwini Vaishnaw said in a media briefing. This investment is over and above the PLI schemes for auto and auto component sectors, the minister said.
The PM E-Drive Scheme replaces the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) Scheme, which was launched in April 2015 and ran for nine years in two different editions. During the second edition of this scheme, which was valid until March 31, 2024, the government subsidised 13,21,800 EVs with a total outlay of Rs 11,500 crore.
The FAME II scheme was later replaced by the Rs 500-crore Electric Mobility Promotion Scheme 2024. The phasing out of FAME is anticipated.
The government’s pivot towards PM E-Drive suggests a new approach to supporting electric mobility, though details on its implementation and objectives remain unclear.
Industry stakeholders are now awaiting further clarification on how the new initiative will impact EV adoption and manufacturing in India.
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