Prices of electric two-wheelers from Ola Electric, Ather Energy, Hero Vida and other manufacturers are likely to increase significantly in the near future as the center plans to reduce subsidies under the FAME II scheme to promote electric vehicles. The Ministry of Heavy Industry has proposed a subsidy of 15 percent for electric two-wheelers. If its proposal is accepted by the central group overseeing the FAME II revision process, it will affect the prices of all models that fall under the subsidy scheme.
Earlier this week, at least 24 electric two-wheeler makers benefiting from the FAME II program met to discuss the matter.The outcome of the meeting was to keep demand incentives at ¥10,000 per kWh battery capacity. Apart from this, there was also a consensus to reduce the pre-showroom price ceiling for electric two-wheelers from 40% to 15%.News agency PTI quoted a government official as saying, “We have decided to transfer unused subsidies to ¥Rs 1,500 crore from 3-wheelers and 4-wheelers to 2-wheelers, but it has been found that at the current rate of payment (ex-factory price is capped at 40 pieces), the scheme will end in two months. “
The ministry’s proposal will be reviewed by the Program Implementation and Steering Committee (PISC), with a final decision expected shortly.
Also read: Ola, Ather, Hero and TVS agree to refund customers for FAME II rewards
Even if the ministry proposes to increase spending on electric two-wheelers under the FAME II scheme, the subsidy may be reduced. As of now, there are no plans to extend the FAME II program beyond next March, despite requests from several manufacturers. The government may not even introduce a FAME III program.
Despite the increased allocation of funds under FAME II, the decision to reduce subsidies is aimed at further strengthening India’s EV infrastructure. Union Minister Mahendra Nath Pandey said, “The consensus reached during the stakeholder consultation marks a positive step forward for India towards sustainable transport solutions. With continued efforts and collaboration between the government and industry, India can become a sustainable A global leader in transportation and reducing our dependence on fossil fuels.”
FAME II was scheduled to launch in India four years ago. The scheme was valid for three years and was later extended for another two years. The current scheme will officially end on March 31 next year.The total cost of the program is ¥100 billion aims to incentivize EV buyers to actively promote the EV transition.
First published date: May 18, 2023 at 10:24 AM CST
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