PM E Drive Scheme 2024 to Replace Fame 2 Subsidy Scheme

Central government has launched PM E Drive Scheme to promote electric vehicles in India. Full form of PM E-Drive is PM Electric Drive Revolution In Innovative Vehicle Enhancement. This PM E Drive Subsidy scheme will replace the existing FAME programme (Fame I & Fame II) that ran for nine years till March. Under the new PM E-Drive, there is no support for electric cars. It has also excluded hybrid cars contrary to expectations. Read this article till the end to know complete details about new EV subsidy scheme which would replace the already running Fame 2 Subsidy Scheme.

What is PM E Drive Scheme?

As the timeline for Fame 2 subsidy scheme has ended on 31st March 2024, it was likely that govt. will either launch a FAME III version or a new EV subsidy scheme. Accordingly, union govt. has launched a new PM E Drive Scheme for next 2 years and has allocated Rs. 10,900 crore for the same. Under this scheme, central govt. will subsidise electric two wheelers, three wheelers and buses. Hybrid ambulances and electric trucks will also be aided under it.

Components of PM E Drive Scheme

• Subsidies/Demand incentives worth Rs. 3,679 crore to incentivize e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs.
• E-Vouchers for EV buyers to avail demand incentives under the scheme.
• Allocation of Rs. 500 crore for the deployment of e-ambulances.
• Provision of Rs. 4,391 crore for procurement of 14,028 e-buses by STUs/public transport agencies.
• Preference to cities/states, which are being procuring e-buses after scrapping old STU buses.
• Rs. 500 crore allocated for incentivising deployment of e-trucks in the country.
• Installation of 22,100 fast chargers for e-4Ws, 1800 fast chargers for e-buses and 48,400 fast chargers for e-2W/e-3Ws with an outlay for EV PCS at Rs. 2000 crore.

EV Subsidy Target in PM E-Drive Scheme

The newly launched PM E-Drive Scheme will provide financial support in the form of e-vouchers for the following:-

• 24.79 lakh electric two-wheelers,
• 3.16 lakh e-three wheelers, and
• 14,028 e-buses

e-Vouchers for EV Buyers at PM E Drive Scheme Portal

The union govt. will offer e-vouchers for EV buyers to avail demand incentives under the PM E Drive scheme. At the time of purchase of the EV, the PM E Drive Scheme portal will generate an Aadhaar-authenticated e-Voucher for the buyer. Around 88,500 electric vehicle chargers will be set up under the scheme. The decision on PM E-DRIVE Scheme was taken at the meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.

A sum of Rs. 4,391 crore has also been provided for procurement of 14,028 e-buses by state transport undertakings (STUs) and public transport agencies. The demand aggregation will be done by CESL in nine cities with more than 40 lakh population, namely Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune and Hyderabad. Intercity and interstate e-buses will also be supported in consultation with states.

Besides, Rs. 500 crore has been earmarked for the deployment of e-ambulances. This is a new initiative of the government to promote the use of e-ambulance for a comfortable patient transport. A sum of Rs. 500 crore has been provided for incentivising adoption of e-trucks.

Installation of EV Public Charging Stations

To addresses range anxiety of EV buyers, the govt. will install electric vehicle public charging stations (EVPCS). These EV PCS would be installed in the selected cities with high EV penetration and also on selected highways. The scheme proposes the installation of 22,100 fast chargers for e-4Ws (electric four-wheelers), 1,800 fast chargers for e-buses and 48,400 fast chargers for e-2W/3Ws. The outlay for EVPCS will be Rs 2,000 crore.

PM E Drive Scheme will be a big help in having sustainable growth and making sure that our country progresses rapidly on the electric vehicles movement.

PSM Scheme for e-Buses

PM-eBus Sewa-Payment Security Mechanism (PSM) scheme for procurement and operation of e-buses by Public Transport Authorities (PTAs) has an outlay of Rs. 3,435 crore to support the roll-out of 38,000 e-buses. "This scheme will support deployment of more than 38,000 electric buses (e-Buses) from FY 2024-25 to FY 2028-29. The scheme will support the operation of e-buses for a period of up to 12 years from the date of deployment," an official release said. At present, the majority of buses operated by PTAs run on diesel/CNG, causing adverse environmental impact. On the other hand, e-buses are environment-friendly and have lower operational cost.

However, it was anticipated that PTAs would find it challenging to procure and operate e-buses because of their high upfront cost and lower realisation of revenue from operations, the release said. To address the high capital cost of e-buses, public transport authorities induct these buses through Public Private Partnership on Gross Cost Contract (GCC) model. The PTAs are not required to pay the upfront cost of the bus under the GCC model, instead OEMs/operators procure and operate e-buses for PTAs with monthly payments. However, OEMs/operators are hesitant to engage in this model due to concerns about potential payment defaults.

The PSM scheme addresses this concern by ensuring timely payments to OEMs/operators through a dedicated fund. In case of default of payments by PTAs, CESL, the implementing agency, shall make necessary payments from the scheme funds which will be later recouped by the PTAs/state/UTs, the release added.

Background

Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) Scheme Phase 1 was launched in April 2015 while phase 2 was launched in 2019. The FAME scheme was launched to encourage local manufacturing and sales of electric vehicles by extending demand incentives to end customers. Over 16 lakh EVs were supported under the FAME scheme.