Mild hybrid cars will no longer benefit from FAME incentives

Back in 2015, the central government announced the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme to encourage automakers to switch over to greener technology. Discounts of up to Rs 29,000 were offered on two wheelers, while discount on four-wheelers went up to Rs 1.38 lakh. Popular sellers like Ciaz and Ertiga from Maruti Suzuki as well as Scorpio from Mahindra will be among the ones affected by this move.

As per Department of Heavy Industries, of the Rs 40 Crore funds allocated, close to 60 per cent of the total allotments were portioned for mild hybrid cars while the more eco-friendly but expensive full electric cars received only about 14 per cent of the total subsidy offered. Now, that incentive amount has been blocked and will be used for the benefit of electro-mobility programme. The report went on to state that although mild diesel hybrid vehicles showed marginal improvement over conventional diesel models, it still continues to be polluting and fuel inefficient, compared to electric and strong hybrid cars.  

As of today, cars with mild-hybrid technology will no longer benefit under the FAME incentive, however it will continue to attract a lower 11.5 per cent excise cut under the government’s union budget policy in efforts to promote clean technology. Until now, the Ciaz sedan and the Ertiga MPV from Maruti Suzuki attracted a subsidy of Rs 13,000 under the FAME scheme. Though this benefit will no longer be passed on to the customers, they can however avail Rs 10, 000 off being offered by the automaker. This will mean that interested customers will end up spending an additional Rs 3,000 over the current ex-showroom cost.

As for Mahindra customers, the prices remain unchanged for now, as dealers continue to offer the Intelli-hybrid Scorpio at existing prices until further notifications. Hyundai, the second largest player in the Indian market, which had plans to introduce the Creta and the Verna with mild-hybrid technology later this year, will also miss on the incentive benefit.