FAME withdraws subsidy on mild hybrids

The government has withdrawn all subsidies provided for mild hybrids in India, effective from April 1st, 2017. The FAME or ‘Faster Adoption and Manufacturing of Hybrid and Electric Vehicles’ was introduced in 2015 to offer discounts of up to ₹29,000 for two-wheelers and up to ₹1.38 lakh for four wheelers. Maruti's Ertiga and Ciaz will be two vehicles immediately affected by this change.

A mild hybrid vehicle has an electric motor, which on its own cannot run a vehicle but assists normal engine by using recovered energy stored in a battery and helps save fuel. Mild hybrids use the energy generated while applying the brakes and turn it into electric energy that is then stored in a battery. Earlier, mild hybrids, strong hybrids, plug-in hybrids and pure electric vehicles were given incentives under the scheme in a bid to encourage the auto industry to produce more environmentally-friendly products. Both the Ertiga and Ciaz used to enjoy almost ₹13,000 off their final prices. 

Though this move may not have been warmly received by the auto industry, environmentalists around the country are welcoming the decision. Delhi-based green body and advocacy group Centre for Science and Environment (CSE) said that the mild hybrids have in turn been blocking the strong hybrids from making a difference, as they do not offer the same level of reduction in toxic emissions. 

Anumita Roychowdhury, executive director-research and advocacy, CSE, said, "By removing the mild diesel hybrids from the FAME scheme, the entire incentive amount has now been unlocked for the benefit of electro-mobility programme. These mild diesel hybrids are a marginal improvement over conventional diesel models, but significantly more polluting and fuel inefficient compared to electric and strong hybrid cars."

Almost 60 percent of the total funds allotted for the FAME scheme have been invested in the mild hybrid industry.