- 12 Sep 2024
- ICICI Securities
CABINET APPROVES PM E-DRIVE SCHEME (FAME-III)
News: According to a press release, the Cabinet has approved the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, allocating ₹10,900 crore over two years to advance adoption of electric mobility in India. This initiative will replace the previous FAME II Scheme and aims to facilitate the adoption of 24.79 lakh electric 2-W, 3.16 lakh electric 3-W and 14,028 electric buses. Subsidies/Demand incentives worth ₹ 3,679 crore have been provided to incentivize e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs. Additionally, ₹4,391 crore is designated for the procurement of E-buses by state transport undertakings and public transport agencies with preference for new buses procurement against scrapped vehicles. Also, the scheme allocates ₹500 crore each for adoption of e-ambulances and E-trucks. A total of ₹2,000 crore is also earmarked for the installation of 22,100 fast chargers for electric 4-W, 1,800 fast chargers for E-buses and 48,400 fast chargers for electric 2/3-W, ensuring robust infrastructure to support the growing electric vehicle market.
Views: The scheme looks comprehensive as it addresses the need for incentives on the demand side as well as envisages requisite capex on charging infrastructure addressing the issue of range anxiety. Continuation of Fame scheme was much awaited for further adoption of EV’s domestically. We are however unclear as to fate of E-4W for public transport which are not mentioned in the press release. This policy is certainly positive for the E-mobility players in the 2-W,3-W and Buses segment with clear beneficiaries being Bajaj Auto & TVS Motors on the 2-W side, M&M & Bajaj Auto on the 3-W side and Tata Motors & Ashok Leyland on the E-buses space.
Impact: Positive