FAME incentives withdrawn for mild hybrids

The incentives for eco-friendly vehicles under the FAME scheme has been withdrawn for mild-hybrid vehicles.

The FAME scheme was introduced in April 2015 to promote the sale of eco-friendly vehicles in India. Initially, the incentives were given to buyers of mild-hybrid, plug in hybrids, strong hybrids, and pure electric cars which were manufactured or assembled in India. Now the Indian government has withdrawn the subsidy for mild hybrid vehicles.

The change in the scheme directly affects India’s largest car manufacturer, Maruti Suzuki who manufactures and sells two mild hybrid vehicles, the Ciaz mid-size sedan and the Ertiga MUV. The Ciaz and the Ertiga both feature Suzuki’s Smart Hybrid Vehicle System (SHVS) technology which comes as standard with the 1.3-litre, 4-cylinder turbo diesel engine. Under the FAME scheme, the Ciaz and Ertiga diesel SHVS were given incentives of Rs. 13,000 each.

The exclusion of mild hybrids is now in affect as of April 1, 2017 as notified by the Ministry of Heavy Industries and Public Enterprises. The reason for the exclusion is that the technology does not allow the vehicle to run on electric power alone and only assists the internal combustion engine (ICE) by recovering kinetic energy and harvesting it in a battery to deliver a small boost and help save fuel.

Phase I of the FAME scheme has been extended to September 30 and now only include full Electric Vehicle (EV), Plug-in Hybrid Electric Vehicles (PHEV) and Hybrid Vehicles which get incentives of Rs. 29,000 for two wheelers Rs. 1.38 lakh for four wheelers that are manufactured or assembled in India.