FAME SCHEME INTRODUCES INCENTIVES FOR ELECTRIC BUSES

Government of India launched FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) programme in March 2015 to spur purchase and usage of electric vehicles. The Department of Heavy Industries (DHI) had launched FAME (Faster Adaptation and Manufacturing of (Hybrid &) Electric Vehicles) in April 2015 to promote manufacturing of electric and hybrid vehicles in India. FAME was earlier focused on electric two-wheelers, electric cars and hybrid vehicles. This fund was allocated for duration of two years.

MoHPE (Ministry of Heavy Industries and Public Enterprises) has extended the Phase I of the FAME India Scheme by six months, i.e. till 31 March 2018. Furthermore, the ministry has issued a notification to include Electric Bus under the FAME scheme.

Currently, there are around 1.6 million registered buses in India, out of which only 170,000 are operated by public bus operators. Only 5,000 buses are operated under PPP model for city bus operation. There is need to increase the supply of buses in Indian cities to develop sustainable public transport. However, the cities should have a larger vision to curb dependence on fossil fuel and reduce CO2 emissions. It is right time that public transport vehicles shift their source of power from diesel to electricity.

DHI has replaced Bus Electric Energy Consumption Criteria to qualify a vehicle under FAME scheme. The new criterion is:

Parameter

BEV

Maximum Energy Consumption (kwh/100 km)

Less than 175

The incentives for fully electric buses (category M2 & M3 as per CMVR) are:

  • Incentive Level 1 (In case of localisation of minimum 15% is achieved): 60% of purchase cost or INR 8.5 million, whichever is lower
  • Incentive Level 2 (In case of localisation of minimum 35% is achieved): 60% of purchase cost or INR 10 million, whichever is lower

The ministry proposes to give an additional financial assistance shall be provided towards purchase of charging equipment up to 10% of total eligible demand incentive for purchase of fleet of EV buses as per the contract agreement between purchaser and OEM/manufacturer/supplier to State Transport Undertakings / Municipal Corporations.

As per the guidelines, the purchaser has to finalise the supply after following due tendering process and the incentive amount will be decided based on the supply order issued by the purchaser.  The ministry highlighted that localisation will be calculated based on Ex-Factory Price. OEM/Supplier to issue self-certification about localization contents; however, DHI retains the right to get the same validated from specialized expert agencies. Further, the ministry can disburse the incentive to a purchaser or to a supplier or manufacturer based on their mutual consent. Incentive amount will be disbursed in three equal installments to be paid in three years. First installment will be released after conclusion of supply order/contract.

The following cities are procuring / conducting trails of electric buses in India:

Other cities like Chandigarh, Hyderabad, Chennai, and Ahmedabad are conducting trial of electric buses.

Currently, the following operators have placed an order for the electric buses in India.

 

The FAME policy aims to promote the procurement of electric buses in future.