Automobile Industry

Mild-hybrid Cars Get Pricier Due To Removal Of FAME Benefits

2017 Maruti Ciaz SHVS

The notification was issued by Ministry of Heavy Industries and Public Enterprises.

With an aim to promote eco-friendly vehicles, the government introduced the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme in India in April 2015. This scheme certainly worked in favour of both car manufacturers and buyers. Under the FAME scheme, the government was offering incentives on electric and hybrid vehicles up to Rs 29,000 (two-wheelers) – Rs 1.38 lakh (four-wheelers).

Unfortunately, the central government has now withdrawn the subsidies offered on the mild hybrid diesel vehicles in India from 1st April 2017. The notification was issued by Ministry of Heavy Industries and Public Enterprises. One must note that the fully-hybrid cars such as Toyota Camry, BMW i8 and Honda Accord are still beneficiaries of the FAME schemes.

The FAME benefits ban on the mild hybrid vehicles is brought to increase the sales of full hybrid and electric vehicles, that otherwise are being affected by the mild ones. Another reason is the fuel and emission levels of the mild hybrid cars, which are relatively high than the full hybrids. From 1st April 2015 to 28th February 2017, a total of 1,11,897 vehicles availed the FAME benefits. Out of which, around 73,633 units are of mild hybrid cars.

Anumita Roychowdhury, executive director-research and advocacy, CSE (Centre for Science and Environment), 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.”

This announcement will affect a range of cars, which were enjoying good sales in the market. The list includes Maruti’s mid-size saloon Ciaz and Ertiga MPV, and three Mahindra SUVs – Scorpio, XUV500 and TUV300. Moreover, the FAME benefits ban will also impact the upcoming new-generation Hyundai Verna and Creta facelift with mild-hybrid system, which are due for late 2017.

Mild-hybrid Vehicles On-road Price (With FAME Benefits) On-road Price (Without FAME Benefits)
Maruti Ciaz SHVS Rs 7.73 lakh Rs 9.54 lakh Rs 8.7 lakh – Rs 10.7 lakh
Maruti Ertiga SHVS Rs 7.13 lakh – Rs 8.71 lakh Rs 8 lakh – Rs 9.8 lakh


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