The FAME-India initiative which was announced a few weeks back has already started generating positive responses. Mahindra is the first of many manufacturers who have announced a drop in the prices of their electric offering in the market. The Mahindra e2O range now starts at Rs 4.99 lakh for the T2 Premium which was earlier priced at Rs 6.76 lakh, ex-Mumbai. The premium T2O Quick2Charge variant retails for Rs 5.38 lakh as opposed to the Rs 7 lakh plus price earlier. In New Delhi, the Mahindra e2O now retails for Rs 4.79 lakh on-road.
Mahindra says that if there are any existing incentives applicable on the e2O, then this discount is over and above those. Currently the discount on the Mahindra e2O is applicable on Delhi and NCR, Kolkata, greater Mumbai, Bengaluru, Hyderabad, Ahmedabad, Chennai, smart cities as well as cities with one million plus population as notified by the Government. The incentives, however, don't stretch to the battery leasing scheme which still continues at Rs 2,999/month.
The new FAME or Faster Adoption and Manufacture of Electric vehicles scheme aims at providing incentives to manufacturers to build hybrid and electric vehicles. India has one of the fastest growing economies and also one of the fastest growing auto industries. On the negative side, we also rank highly amongst the worst polluted cities in the world. And our expected fossil fuel consumption is set to go up by a whopping 70 per cent in the next ten years. So you can see the urgency of the matter.
This year's Union Budget earmarked a paltry Rs 75 crore for incentives towards electric and hybrid vehicle development. Naturally this raised a lot of eyebrows but the FAME scheme increases that number ten fold to Rs 795 crore. The scheme will be implemented in a phased manner. The first phase will be over the course of two years, from 2015 to 2017. Fresh funding will be allocated from 2017 to 2020. Of the approved outlay of Rs 795 crore, Rs 500 crore is earmarked for demand incentives alone. The rest will be spent on other aspects such as developing charging infrastructure, promoting pilot projects, developing technology platforms and so on. Of this, it's the incentives and infrastructure development that are of major importance to the end customer.
The process of applying for these incentives is relatively straightforward. To qualify, the vehicle must be made in India so that rules out CBUs like the BMW 7 Series Active Hybrid and the new BMW i8. First, the manufacturer must register with the National Automotive Board. Then the vehicle goes through the usual process of homologation and crash test worthiness at a recognised institute like ARAI, iCAT or VRDE. However, these institutes will now be upgraded with equipment like motor test beds and battery test beds. Thus, as an addition to the homologation process, a vehicle's claim of efficiency, battery and electric motor performance will also be ratified. After this, the standard processes of production, dispatch, and sales will follow. Then the vehicle is registered and the buyer has benefited from the cheaper price. Only after this can the companies apply to the government for the incentive to be transferred to them.
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