Government withdraws subsidy to mild hybrids cars

• The Central Government has effectively withdrawn the subsidies that have been provided to mild hybrid diesel cars under the FAME scheme.
• The FAME or ‘Faster Adoption and Manufacturing of Hybrid and Electric Vehicles’ was introduced in 2015 and offered discounts of up to Rs 29,000 for two wheelers and up to Rs 1.38 lakh for four wheelers.
• The change in policy will affect the prices of two Maruti Suzuki vehicles in India, the Ertiga and the Ciaz. Incidentally, the Ciaz was just recently moved to the Nexa chain of premium dealerships.
• The Ciaz and the Ertiga were receiving a subsidy of Rs 13,000 on the on-road price of the cars under the FAME scheme, which means that a correction in prices for the two models might be imminent.

About mild hybrid technology

• Mild hybrid technology is different from plug-in or conventional hybrid vehicles.
• Mild hybrid vehicles use the energy generated while applying the brakes and turns it into electric energy that is then stored in a battery.
• This energy can then be used to turn the starter motor when the car’s start stop system needs it.
• In most cases, a mild hybrid will turn its engine off when at idle or when it comes to a halt at a traffic signal for instance.
• Research shows that mild-hybrids are only 7-15% more fuel efficient as compared to conventional hybrid systems that can run on pure electric power for short distances too.

About FAME scheme:

• Government of India has notified FAME India Scheme [Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India] for implementation with effect from 1st April 2015, with the objective to support hybrid/electric vehicles market development and Manufacturing eco-system.
• The scheme has 4 focus areas i.e. Technology development, Demand Creation, Pilot Projects and Charging Infrastructure. The phase-I of the scheme is being implemented for a period of 2 years i.e. FY 2015-16 and FY 2016-17 commencing from 1st April 2015.
• The FAME India Scheme is aimed at incentivising all vehicle segments i.e. 2 Wheeler, 3 Wheeler Auto, Passenger 4 Wheeler Vehicle, Light Commercial Vehicles and Buses.
• The scheme covers Hybrid & Electric technologies like Mild Hybrid, Strong Hybrid, Plug in Hybrid & Battery Electric Vehicles.
• During the Financial Year 2015-16, an amount of Rs. 75 Crore was allocated for this scheme, which was almost fully utilised.
• In the current financial year 2016-17, Rs. 91 Crore (approx) has already been utilised out of the budget allocation of Rs. 122.90 Crore.
• Under this scheme, about 99000 hybrid/electric vehicles (xEVs) have been given direct support by way of demand incentives since the launch on 1st April 2015. Department has also approved pilot projects, charging infrastructure projects and technological development projects aggregating to nearly Rs. 155 Crores.

By: Vishal