FAME Subsidy Withdrawn With Effect From April 1, Mild Hybrid Vehicles To Cost More

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Announced in April 2015, the FAME (faster adoption and manufacturing of hybrid and electric vehicles) scheme has been recently withdrawn by the Government of India. The discontinuation of the scheme comes into effect exactly two years after it came into effect.

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As a part of the government’s plan to promote eco-friendly vehicles in India, the FAME scheme awarded subsidies for mild hybrids, full hybrids, plug-in hybrid and fully electric vehicles. The subsidies ranged from INR 29,000 to INR 1.38 lakh. This scheme has been withdrawn from April 1, 2017.

Also read: Sales Of Maruti Suzuki Smart Hybrid Vehicles Surpass One Lakh Units

The most affected automobile manufacturer due the withdrawal of the subsidy would be Maruti Suzuki. The company offers its SHVS (Smart Hybrid Vehicle System) mild-hybrid technology on the Ertiga as well as the Ciaz. Under the FAME scheme, the models received a benefit of INR 13,000. This benefit though, was applicable on the on-road price of the car and hence, the current ex-showroom prices of the models will remain unchanged.

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Mild hybrid vehicles use regenerative braking, a system that generates energy when the brakes are applied and stores this energy in the battery. This energy is then used to operate the starter motor as and when the vehicle’s start-stop system requires. The process results in a better fuel efficiency for the vehicle.

With inputs from PTI

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