Indian Government Removed FAME Subsidy For Mild Hybrid Vehicles

The Central Government, which is responsible for providing subsidies under FAME scheme for various categories of vehicles such as mild hybrid, strong hybrid, plug-in hybrid and pure electric vehicles, has recently excluded mild hybrid vehicles from subsidy incentives.

The FAME scheme, which is an abbreviation of ‘Faster Adoption and Manufacturing of Hybrid and Electric Vehicles’ was came into existence in 2015. It is a part of National Electric Mobility Mission Plan (NEMMP), and is regulated by the Heavy Industry Ministry. Basically, it offers incentives on electric and hybrid vehicles (two-wheelers & four-wheelers) of upto Rs 29,000 and Rs 1.38 lakh respectively.

With this change in policy, the country’s leading carmaker, Maruti Suzuki will witness fluctuation in price of its two models comprises the Ertiga and the Ciaz. The Ciaz, a premium sedan has recently been shifted to the premium Nexa dealership from the regular dealership.

Earlier, under this FAME scheme, both the Maruti Suzuki’s models, which are equipped with mild hybrid technology, received the subsidy benefit of Rs. 13,000 from the Indian government, which is expected to revise in near future. However, the excise duty will be the same 11.5% as mentioned under the government’s union budget policy for encouraging cleaner technology.

In terms of working mechanism, Mild hybrid vehicles are different from plug-in or conventional hybrid vehicles. They use an electric motor, however, it on its own cannot not run a vehicle. it only assists the equipped normal engine, by supplying power through the connected battery. The battery stores energy generated while braking, by transforming it into electric energy and then use it when car’s start stop system needs it.

According to the studies, comparatively, mild-hybrids are 7-15% more fuel efficient than the conventional hybrid systems. However, it is a different thing that traditional hybrid vehicles can cover a short distance travel from pure electric power.
Till now, the manufacturers have got the incentive benefits of around Rs 66 Crore, under this FAME program. Out of which, almost Rs 40 Crore, which is more or less 60% of the total allocated amount, is meant for the mild hybrid cars. While the electric vehicles, which are more eco-friendly yet more expensive only received around 14% of the total allocated subsidy.