FAME India Scheme and Electric Mobility: Phase II, PM E-Drive and UPSC Notes (UPSC Environment)

Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) is the flagship scheme through which the Government of India has subsidised the purchase and manufacturing of electric vehicles. Phase I ran from 2015 to 2019; Phase II ran from 2019 to March 2024; the scheme was succeeded in September 2024 by the PM E-Drive scheme and the Electric Mobility Promotion Scheme. Together, these schemes underpin India's commitment to replace a significant share of its fossil-fuel-based vehicle fleet with cleaner alternatives. The topic is a recurring UPSC theme under GS Paper III (energy, environment, economy).

Why switch to electric vehicles

Energy efficiency

Battery-electric vehicles have a tank-to-wheel efficiency of about 85 percent compared to roughly 20 percent for internal combustion engines. Even when charged from the grid, well-to-wheel efficiency is substantially better than ICE vehicles.

Reducing crude imports

India imports over 80 percent of its crude oil. The transport sector is the second-largest energy-consuming sector. Electric vehicles offer a pathway to energy independence.

Power surplus and renewables

India is a power-surplus country with total installed capacity exceeding 450 GW as of early 2025. Higher power demand from EVs can be met domestically. The renewable share is growing, with India targeting 500 GW non-fossil capacity by 2030, meaning EVs can increasingly run on clean power.

Urban air quality

Pollution from internal combustion engines is a major cause of poor urban air quality. India is home to many of the world's most polluted cities. EVs are a direct mitigation.

Strategic head start

Developed countries are phasing out ICE vehicles, and major markets have announced 2035-2040 bans. India's large auto industry needs to transition in time or risk losing global market share.

FAME India Scheme Phase II

The Department of Heavy Industry notified Phase II in March 2019 with an outlay of Rs 10,000 crore for three years from 1 April 2019, later extended to 31 March 2024.

Main objectives

• Encourage faster adoption of electric and hybrid vehicles through upfront incentives on purchase.
• Establish charging infrastructure.
• Electrify public transportation including shared mobility (three-wheelers, buses, taxis).

Components

• Demand incentives for electric two-wheelers, three-wheelers, four-wheelers (shared commercial) and buses.
• Charging infrastructure: About 2,700 charging stations planned to ensure one station in every 3 km by 3 km urban grid and along major highways.

Major amendments

• Demand incentives for electric two-wheelers raised to Rs 15,000 per kWh from the earlier Rs 10,000 per kWh.
• Cap on subsidy for two-wheelers raised to 40 percent of vehicle cost, up from 20 percent.
• Later, from June 2023, the cap was moderated and localisation norms tightened after several OEMs were found to have misused the subsidy.

Impact

• India's EV sales crossed 15 lakh units in FY24, with two-wheelers and three-wheelers leading adoption.
• Electric three-wheelers already account for over 50 percent of new three-wheeler sales in several states.
• Electric buses crossed 10,000 units on road by end of 2024.

Successor schemes (2024-26)

PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive)

Notified in September 2024 with an outlay of Rs 10,900 crore for two years from October 2024. Covers:

• Subsidies for electric two-wheelers, three-wheelers, ambulances and trucks.
• Deployment of 14,028 electric buses, including public transport buses for State Transport Undertakings.
• Upgradation of testing agencies.
• Rs 2,000 crore for public charging stations.

Electric Mobility Promotion Scheme (EMPS) 2024

Covers the gap between FAME II and PM E-Drive, from April to September 2024.

Limitations of lithium-ion batteries

The current EV fleet in India runs mostly on lithium-ion batteries (LiBs), which has several challenges.

• Cost: Batteries are expensive, constituting 30 to 40 percent of EV cost.
• Range: Most LiBs are unsuitable for long-distance travel without fast charging.
• Weight: LiBs in four-wheelers weigh about 500 kg, much of the vehicle weight.
• Materials: LiBs use lithium, cobalt, nickel and manganese, which are concentrated in few countries like Bolivia, Chile, Australia and the Democratic Republic of Congo, raising supply chain risk.
• Mining impact: Mining of these minerals can cause local environmental damage.
• Grid emissions: Charging LiBs from fossil-based grid electricity still generates indirect emissions.

Other challenges

• Charging infrastructure gap: Especially in smaller cities and highways. Lack of standardisation across states.
• Battery recycling: Disposal of end-of-life lithium-ion batteries; Battery Waste Management Rules 2022 aim to address this.
• Battery swapping: Ongoing policy debate on battery swapping as an alternative to long charging; ACC PLI scheme addresses domestic cell manufacturing.
• Job impacts: EVs have about 20 moving parts versus 2,000 in ICE vehicles. Transition will reduce jobs in MSME auto-component sector; Just Transition planning is needed.
• Battery safety: Several fires in electric scooters in 2022-23 exposed weak quality standards; BIS standards for LiB cells were tightened from 2023.

Way forward

• Active participation of the auto industry, MSMEs and R&D ecosystem.
• Phased manufacturing plan with fiscal and non-fiscal incentives; ACC PLI scheme supports 50 GWh of domestic battery cell manufacturing.
• Enhanced R&D into solid-state batteries, sodium-ion batteries and hydrogen fuel cells.
• Public procurement push for electric buses, government fleets, and last-mile delivery.
• Training and skilling for EV manufacturing, charging infrastructure operation and battery recycling workers.
• Standards and safety norms for charging stations, battery swapping and fire safety.

Latest developments (2024-26)

• PM E-Drive scheme launched September 2024 with Rs 10,900 crore outlay.
• ACC PLI Round II announced in 2024, adding 20 GWh capacity on top of the earlier 50 GWh.
• National Critical Mineral Mission launched in 2024 to secure lithium, cobalt, nickel and rare earths.
• Lithium find in Jammu and Kashmir (5.9 million tonnes of inferred resources) announced in 2023; exploration continues in 2025.
• Electric bus deployment: Convergence Energy Services Ltd (CESL) tenders crossed 12,000 e-buses by 2024.
• Battery Waste Management Rules operationalised; EPR certificate market expanded in 2024.
• COP29 Baku (2024): India's updated NDCs emphasised electric mobility as a core mitigation pillar.
• EV30@30: India reiterated its commitment to the global EV30@30 initiative (30 percent EV sales by 2030) under the Clean Energy Ministerial framework.

UPSC Relevance

Prelims focus

• FAME I (2015-19) and FAME II (2019-24), outlay Rs 10,000 crore; PM E-Drive 2024 outlay Rs 10,900 crore.
• ACC PLI scheme: Advanced Chemistry Cell manufacturing.
• National Critical Mineral Mission (2024).
• Battery Waste Management Rules, 2022.
• EV30@30 initiative.
• BIS standards for LiB cells.

Mains focus (GS III)

Typical question framings evaluate the effectiveness of FAME in accelerating EV adoption, the role of domestic battery manufacturing, critical minerals and supply chain risks, and the just transition for ICE workers. Strong answers cite the two schemes, ACC PLI, lithium reserve discoveries and international comparisons.

Linkages

FAME connects to SDG 7, SDG 11, SDG 13, India's updated NDCs after COP29, the Energy Conservation Amendment Act 2022, the Indian Carbon Market, the Green Hydrogen Mission, the Critical Minerals Mission and the Battery Waste Management Rules 2022.