Electric Two-Wheelers Will Get More Expensive Now

 

 

 

 

 

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The Faster Adoption and Manufacturing of (hybrid &) Electric vehicles Phase II (FAME II) scheme was implemented in April 2019 by the central government to incentivise buyers to purchase electric 2-wheelers by providing a substantial subsidy on their price. This subsidy was Rs 15,000 per kWh of battery capacity with a maximum cap of 40-percent of the ex-factory price of the 2-wheeler (with a maximum ex-factory price of Rs 1.5 lakh). For this scheme, the central government had set aside Rs 10,000 Crore till the end of March 2024. But with EV two-wheeler sales shooting up dramatically, almost 800,000 EV 2-wheelers have been sold in the country since the inception of this scheme till Feb 15, 2023.

With 80 percent of the targeted one million EV 2-wheelers already having received this subsidy, the government has slashed this subsidy to Rs 10,000 per kWh of battery capacity with an upper cap of 15 percent of the ex-factory price of the vehicle. So currently, while subsidies ranged from Rs 17,000 to Rs 66,000 depending on the battery capacity and price of the 2-wheeler, now, expect them to go as low as Rs 15,000 to Rs 20,000 for the same vehicles. So all your favourite electric scooters are set to get a significant price hike.

Here is what we expect the new subsidies and approximate price increases would be for some of the country’s top-selling electric two-wheelers.

Now it’s important to note that we have only considered the FAME II subsidy decrease to give you the approximate increase in cost. But considering that the maximum subsidy has been capped to 15 percent of the vehicles’ ex-factory price, as opposed to the earlier 40 percent, expect those price increases to be a lot more - easily double, or more than what we’ve stated. 

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While this increase is definitely quite massive, it’s far better than an abrupt stop in the subsidy, and officials have said that there are talks about adding a further Rs 2,000 crore to the scheme to keep the subsidy going (albeit at the reduced rates). Currently though, state subsidies over and above FAME II subsidies are still applicable and haven’t changed, although some states might have already cut those down in the recent past. These new subsidy rates will be applicable in the next 15-20 days, so if you were thinking about getting your hands on a brand new electric 2-wheeler, the time is NOW!