What is the FAME II Subsidy and How Does it Benefit Electric Scooter Buyers in India?

The electric vehicle (EV) sector in India is booming, largely propelled by government incentives aimed at reducing air pollution and reliance on fossil fuels. The cornerstone of this push has been the FAME scheme. Understanding what is FAME 2 subsidy is essential for any buyer looking to purchase an electric two-wheeler today.

What is Electric Scooter FAME II Subsidy?

FAME stands for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India. The FAME II Scheme, launched in 2019 with a massive budget of ₹10,000 crore, was the second phase of this national initiative.

• Primary Goal: The central objective of the electric scooter FAME II subsidy was to lower the upfront cost of electric vehicles, making them more affordable and accessible to end-users.
• Mechanism: The subsidy was offered as a demand incentive to buyers in the form of an upfront price reduction on the purchase of an eligible EV.
• Status Update (2024/2025): The FAME II scheme officially concluded on March 31, 2024. It has since been replaced by the transitional Electric Mobility Promotion Scheme (EMPS) 2024, which continues to offer financial support for electric two-wheelers, albeit at revised rates.

Eligibility Criteria for Claiming the FAME II Subsidy

While the FAME II scheme is no longer active for new purchases, its requirements set the precedent for current schemes. To qualify for the electric scooter FAME II subsidy, both the buyer and the vehicle had to meet specific criteria, which define the FAME 2 subsidy eligibility standard for government incentives.

Vehicle Requirements:

• The EV model had to be registered under the FAME II subsidy vehicle list.
• The vehicle had to be registered as a "Motor Vehicle" and comply with CMVR regulations.
• It must use an advanced chemistry battery, such as a lithium-ion battery.
• The scooter had to meet minimum performance benchmarks like range, top speed, and efficiency.

Buyer Requirements (fame 2 subsidy eligibility):

• The buyer must be an Indian resident with a valid ID proof (e.g., Aadhaar).
• The buyer must not have previously claimed the FAME II subsidy for another electric two-wheeler.
• The name used for registration had to exactly match the name on the ID proof.

How to claim FAME 2 subsidy?

For vehicles eligible under FAME II, the process of how to claim subsidy for electric scooter was designed to be simple for the buyer.

1. Purchase from an Approved Dealer: The buyer had to purchase the vehicle from an authorized dealer participating in the FAME program.
2. Automatic Deduction: The FAME subsidy amount was automatically deducted from the vehicle's price at the time of purchase. This meant the buyer paid the discounted Electric Scooter price upfront.
3. OEM/Dealer Handles Claim: The manufacturer (OEM) or dealer handled the actual submission and verification of the claim with the FAME II portal, requiring minimal effort or extra paperwork from the buyer.

How the FAME II Subsidy Amount is Calculated?

The Electric Scooter price reduction under FAME II was based on the scooter's battery capacity, though the maximum benefit was capped.

• Incentive Rate: The government offered an incentive of ₹15,000 per kWh of the battery capacity. (This rate was an increase from the earlier ₹10,000 per kWh).
• Maximum Cap: The total subsidy amount was capped at a percentage of the vehicle's ex-factory price. It was initially capped at 40% of the vehicle cost, which was later revised down to 15% effective June 1, 2023.
• Impact on Models (Estimated): This calculation directly lowered the vehicle's purchase cost. For example, the final Ather price after FAME 2 subsidy was the Ex-showroom Price minus the FAME II subsidy, plus any applicable state subsidy or RTO charges.

Benefits of FAME II Subsidy for Electric Scooter Buyers

The electric scooter FAME II subsidy was a powerful tool that accelerated the shift toward cleaner transportation, primarily by bridging the cost difference with petrol scooters.

• Financial Accessibility: The direct, upfront reduction in the Electric Scooter price made advanced EVs more financially accessible to the average commuter.
• Encouraged Innovation: By linking the incentive to battery capacity and performance, the scheme encouraged manufacturers to develop better battery technology and offer higher-quality vehicles.
• Everyday Savings: A lower purchase price, combined with the inherently low running and maintenance costs of EVs, secured significant long-term financial savings for buyers.
• Environmental Impact: The incentive helped India meet its goals of reducing vehicular emissions and dependence on fossil fuels.

Even though “what is FAME 2 subsidy” is now an irrelevant question, its structure remains key to understanding current government schemes and the affordability of an EV purchase, such as the final Ather price after FAME 2 subsidy during its implementation period.