India’s shift towards green mobility just took a new turn. With the FAME II subsidy update now in effect for 2025, prospective EV buyers and manufacturers are witnessing major shifts in how electric vehicles are incentivized.
If you’re planning to buy an EV this year or are simply curious about how the EV subsidy changes India 2025 impact the market, here’s a clear, people-first breakdown.
What Is the FAME II Subsidy?
FAME stands for Faster Adoption and Manufacturing of Electric Vehicles in India. Launched in 2019, the FAME II scheme was designed to make electric vehicles more accessible and affordable by offering subsidies based on battery capacity and vehicle type.
What Has Changed in 2025?
The FAME II subsidy update for 2025 brings lower incentive amounts, new eligibility criteria, and a revised disbursement model.
Key Changes at a Glance
| Category | Previous Subsidy | New 2025 Subsidy |
|---|---|---|
| Two-Wheelers | ₹15,000 per kWh | ₹10,000 per kWh |
| Maximum Cap on 2-Wheelers | 40% of the vehicle cost | Reduced to 15% of vehicle cost |
| Total Outlay for FAME II | ₹10,000 crore (initial allocation) | Allocation revised downward |
| Eligible Vehicle Categories | 2W, 3W, 4W, buses | Now focused mainly on 2W & 3W |
Why This Update Now?
The EV subsidy changes India 2025 are being rolled out to:
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Focus more on affordable and mass-market EVs (like two- and three-wheelers)
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Encourage self-reliant, India-based EV manufacturing
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Gradually phase out heavy dependence on subsidies as EV adoption grows
How This Impacts EV Buyers
If you’re an EV buyer in 2025, here’s how this change affects you:
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Less subsidy per vehicle means slightly higher upfront costs
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Only select models qualify now — check for updated eligibility
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Focus has shifted from premium electric cars to affordable two-wheelers and commercial three-wheelers
Who Still Qualifies for the Revised FAME II Subsidy?
Eligibility is now more selective. As per the FAME II subsidy update, a vehicle must:
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Be manufactured in India
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Use advanced battery technology (Li-ion, not lead-acid)
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Meet performance and efficiency benchmarks set by the government
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Be part of the approved model list published on the Ministry’s official website
Impact on the EV Market
The updated policy may bring short-term dip in EV sales, especially for premium EVs. However, in the long run, it may boost:
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Indigenous EV production
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Localized battery manufacturing
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Growth of economical EV segments
The EV subsidy changes India 2025 also aim to wean the market off subsidies and make the sector more commercially self-sustaining.
Which EVs Will Be Affected the Most?
Electric scooters and bikes priced above ₹1.5 lakh and four-wheelers above ₹15 lakh are likely to see reduced benefits or be excluded altogether from the subsidy program.
FAQs
1. What is the new subsidy rate for electric two-wheelers in 2025?
The new rate is ₹10,000 per kWh, down from ₹15,000. Also, the maximum cap has been lowered to 15% of the vehicle’s ex-showroom price.
2. Are electric cars still covered under the FAME II subsidy?
Most premium electric cars no longer qualify under the FAME II subsidy update. The focus is now on mass-market 2W and 3W.
3. Will state subsidies continue alongside FAME II?
Yes, many states offer their own EV subsidies and incentives. Check your respective state EV policy for combined benefits.
4. How can I check if my EV is eligible for the subsidy?
You can verify eligibility through the official FAME India website where the list of approved EV models is regularly updated.
Final Thoughts
While the FAME II subsidy update might make EVs a tad costlier in the short term, it’s a strategic move to strengthen India’s EV ecosystem and local manufacturing. If you’re eyeing a budget-friendly electric two-wheeler or a last-mile e-rickshaw, this revised scheme could still work in your favor.
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Pari is a passionate writer known for captivating stories that blend imagination and reality. Inspired by travel, history, and everyday moments, Pari crafts narratives that resonate deeply with readers.