Approach:

Introduction: Mention briefly the FAME scheme and its objectives.

Body: Discuss the key features of the scheme including FAME II. Write about its impact and challenges.

Conclusion: Give a forward-looking optimistic conclusion.

Answer:

The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) India Scheme is a government initiative launched in 2015 to promote the adoption and manufacturing of electric and hybrid vehicles in the country. It aims to reduce vehicular pollution, reduce dependence on fossil fuels, and promote the use of indigenous technology for the manufacturing of electric vehicles.

The scheme has undergone several updates and revisions since its launch, including the recent FAME-II phase having the key features like:

1. Financial Incentives: FAME II- subsidies are provided based on the battery capacity of the vehicle. Higher subsidies are offered for electric vehicles with larger battery capacities, encouraging the adoption of vehicles with longer ranges and greater efficiency.
2. Charging Infrastructure Development: FAME II provides financial support for the establishment of charging stations, including both slow-charging and fast-charging facilities. The scheme encourages the setting up of charging infrastructure in public spaces, residential complexes, workplaces, and other suitable locations to enhance the accessibility and convenience of charging for electric vehicle owners.
3. Demand Aggregation: It promotes demand aggregation to drive economies of scale and reduce the cost of electric vehicles. It encourages government organizations, public transportation agencies, and fleet operators to adopt electric vehicles in bulk.
4. Pilot Projects and Demonstrations: It showcases the feasibility and benefits of electric vehicles in different sectors and regions. These projects help generate awareness, build confidence among consumers, and gather data on the performance and viability of electric vehicles in various use cases. The insights gained from such initiatives inform policy decisions and further promote electric vehicle adoption.
5. Skill Development and Training: It emphasizes skill development and training programs for technicians, engineers, and other professionals involved in the electric vehicle ecosystem.
6. Research and Development Support: It encourages innovation and indigenous development of electric vehicle technologies.

These features of the FAME scheme work together to create a supportive ecosystem for electric vehicles in India.

Impact of the FAME scheme on the growth of the electric vehicle market:

1. Increase in Electric Vehicle Sales: According to the Society of Manufacturers of Electric Vehicles (SMEV), the sales of electric vehicles in India grew by 37% in the fiscal year 2020-2021. This growth can be attributed to the incentives and subsidies provided under the FAME scheme.
2. Expansion of Charging Infrastructure: Under FAME II, the government has sanctioned the installation of 2,636 charging stations across 62 cities in India.
3. Adoption in Public Transportation: Bangalore Metropolitan Transport Corporation (BMTC) introduced electric buses under the FAME scheme, reducing pollution levels and providing a sustainable transport solution.
4. Promotion of E-Rickshaws and E-Cycles: As a means of last-mile connectivity and short-distance transportation, these have not only provided livelihood opportunities for many individuals but have also reduced pollution levels. In Delhi, for example, the FAME scheme contributed to the adoption of over 1 lakh e-rickshaws, positively impacting air quality.
5. Technological Advancements: It has incentivized research and development activities, leading to improvements in battery technology, range, and performance of electric vehicles. For instance, Ola Electric, an Indian electric mobility company, introduced the Ola Electric Scooter with a removable battery pack, promoting convenience and ease of use.
6. Domestic Manufacturing of Electric Vehicles: For example, Tata Motors launched the Tata Nexon EV, an all-electric SUV manufactured in India, which has gained popularity among consumers.

Challenges associated with the FAME scheme:

1. High Initial Cost: Electric vehicles typically have a higher upfront cost compared to conventional vehicles. This higher cost acts as a deterrent for price-sensitive consumers, limiting the adoption of electric vehicles.
2. Limited Charging Infrastructure: It hampers the widespread adoption of electric vehicles as consumers may fear being stranded with no charging options.
3. Range Anxiety: This range limitation makes potential buyers hesitant to opt for electric vehicles, particularly for inter-city or long-distance travel.
4. Battery Technology and Cost: Lithium-ion batteries, commonly used in electric vehicles, contribute to a significant portion of the vehicle's cost which itself is the costliest part of EVs.
5. Limited Domestic Manufacturing: India relies on imports for a large portion of lithium-ion batteries used in electric vehicles. This reliance on imports hampers the development of a robust domestic manufacturing ecosystem and can impact the cost competitiveness of electric vehicles.

Addressing these challenges is crucial to accelerate the adoption of electric vehicles in India and ensure the long-term success of the FAME scheme. Recently, the government announced the slashing of subsidies for the electric 2-wheelers segment - a step which might drag India's EV revolution. A gradual transition with sustained subsidies would have been ideal to ensure market growth and reach the international benchmark of 20% EV adoption. Production-Linked Incentive schemes in automobile and battery cells can also help in bringing enhanced investments and cutting costs for manufacturers.