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FAME incentives no longer applicable on mild hybrid cars

FAME incentives no longer applicable on mild hybrid cars
Nikhil Puthran Nikhil Puthran Monday 03 April 2017, 18:32 PM

In an effort to encourage automakers to switch to greener technology, the central government announced the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme. Under this incentive scheme, discounts of up to Rs 1.38 lakh was available for four-wheelers while for motorcycles, discounts went up to Rs 29,000. But now, the government has decided to put a stopper to this incentive. It is estimated that popular sellers like Ciaz and Ertiga from Maruti Suzuki as well as Scorpio from Mahindra will be among the affected ones.

According to the Department of Heavy Industries, of the Rs 40 Crore funds allocated towards this scheme, 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 only. The report went on to state that though the mild diesel hybrid vehicles showed marginal improvement over conventional diesel models, it still remained 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. They will, however, continue to attract 11.5 per cent excise cut under the government’s union budget policy, which promotes 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 the customers, they can however avail the Rs 10, 000 off being offered by the automaker. Which will mean that interested customers will end up spending an additional Rs 3,000 over the current ex-showroom cost.

Mahindra has not revised the prices for the Scorpio Intelli-hybrid yet and the dealers continue to offer the SUV at existing prices until further notified on the price updates, if any. 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 out on the incentive benefit.


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