Subsidy on electric two-wheelers has been increased by 50 percent under the FAME II scheme – up to 40 percent of total vehicle cost
Over the last one and a half year, there has been appreciable growth in the electric vehicle (EV) segment, especially for two-wheelers. With new manufacturers making an entry into India’s automotive market, the EV space has shown tremendous promise for the future.
The government of India is also doing its part to boost sales of EVs and reduce vehicular emissions by introducing FAME II (Faster Adoption and Manufacturing of Electric Vehicles in India) scheme. This was done in order to extend support to the correct models amidst a gradual rise in the number of two-wheelers in the EV space.
Revised FAME II subsidy
When introduced in 2019 by the Ministry of Heavy Industry (MHI), this policy offered benefits to models which fulfilled eligibility criteria such as a minimum range of 80km and a minimum top speed of 40kph. This scheme offered benefits of a subsidy which amounted to Rs 10,000 per kWh. Now, the government has announced an increase in subsidy by 50 percent which now amounts to Rs 15,000 per kWh for all electric vehicles (EVs) and hybrids, except buses.
Further, MHI has now capped the incentives for electric two-wheelers at 40 percent of the cost of vehicles from the older cap of 20 percent. As of now, the revised policy will be applicable to electric two-wheelers.
Any further changes to the scheme will be released in the coming few days. Considering the central government’s intention to make India an electric vehicle nation by 2030 by helping the adoption of EVs, the latest revisions could also be extended to the passenger vehicle segment.
Ather 450X, 450 Plus price decrease
The increase in subsidy was immediately reflected in the prices of electric scooters. Ather Energy was the first to act upon the initiative as it slashed prices of its premiere offering 450X by Rs 14,500 as a result of this amendment. For Bangalore, Ather 450X now costs Rs 1.44 lakh and Ather Plus now costs Rs 1.25 lakhs. All prices are ex-sh.
Terming this as a phenomenal move, Tarun Mehta, CEO and co-founder of Ather Energy, added, “Sales of electric two-wheelers have grown despite the pandemic and with this additional subsidy, we expect electric two-wheeler sales to disrupt the market, and clock over 6 million units by 2025.”
MHI has also notified that it plans to go for aggregation via the Energy Efficiency Services Limited (EESL) in order to bring the cost of electric 3-wheelers at par with IC engine 3-wheelers. EESL is said to classify demand for 3 lakh electric 3-wheelers into multiple user segments. As of now, 76,008 vehicles have been sold under the FAME II scheme.