The Indian government has cut subsidies for electric two-wheelers, which will apply from June 1, 2023. This will lead to a sharp increase in the prices of electric two-wheelers subsidized by the FAME (Faster Adoption of Electric Vehicle Manufacturing in India)2 scheme. Previously, the Ministry of Heavy Industry proposed to reduce subsidies for electric two-wheelers, which has now been approved and the reduction and exemption policy has been confirmed.
The FAME 2 subsidy cut will affect the pricing of popular models such as the Ather 450X, Ola S1 Pro and TVS iQube, as well as other electric scooters that have received discounts so far.Under the revised FAME 2 scheme, subsidies for electric two-wheelers have been changed from ¥15,000/kWh to ¥10,000/kWh. In addition, the maximum subsidy under the revised FAME 2 scheme is capped at 15% of the ex-factory price of eligible electric two-wheelers, significantly lower than the 40% currently offered.
Also read: The Ather 450X will be more expensive from this date onwards.learn more
For example, if an electric two-wheeler has a pre-showroom price of ¥100,000 people are accepting ¥Of the 40,000 subsidized so far under the FAME 2 scheme, only one will now be received ¥Subsidy 15,000 from now on.This means that buyers of specific electric two-wheelers will have to pay ¥An extra 25,000 out of his or her own pocket.
In the last financial year, FY23, more than 779,000 high-speed electric two-wheelers were sold across India with FAME 2 subsidies. The Ministry of Heavy Industry’s recent move to reduce subsidies under the FAME 2 program will significantly push up the prices of electric two-wheelers.Prices of popular electric scooters expected to rise at most ¥30,000 due to the move. It will be interesting to see how the EV manufacturing industry in India adjusts course and how the demand dynamics unfold in the coming months.
First published date: May 23, 2023 at 11:29 AM CST