Electric Mobility Promotion Scheme Subsidy Extended Till September 2024

• The Electric Mobility Promotion Scheme subsidy was introduced in March 2024
• Under this scheme electric scooters and bikes were eligible for a subsidy of Rs 10,000
• With the extension, the budget for the subsidy has also been increased

The Electric Mobility Promotion Scheme (EMPS) subsidy on electric bikes and scooters has been extended till 30th September 2024, according to the Ministry of Heavy Industries (MHI). The subsidy was earlier launched in March 2024, and was valid till July 31st, 2024.

With this extension, the government has also decided to increase the budget allocated under this scheme. Earlier the budget was Rs 500 crore and now it has been increased to 778 crores. 

Back when it was first launched, the amount of electric vehicles eligible for this subsidy was 3,33,387 units, now it has been increased to 5,00,080 units. 

The subsidy offered a coverage of Rs 5,000 per kWh of the total battery capacity and was capped at 15 percent of the vehicle’s factory price, with a subsidy cap of Rs 10,000. It was introduced as a replacement for the FAME 2 subsidy, which expired on March 31st, 2024.

The extension of the EMPS subsidy is a welcome move and will provide electric two-wheeler manufacturers some much needed relief, while also encouraging potential customers to go for electric vehicles. Manufacturers who want to avail the subsidy need to meet 3 criterias:

• The electric two-wheelers need to be manufactured in India

• EV makers need to have local manufacturing and assembly plants for parts like DC-DC converter, batteries, motors and instrument console

• The minimum vehicle warranty needs to be 3 years or 20,000km, whichever comes first

Overall, it is a short term solution which will help in increasing adoption of EVs, but once the subsidy ends EV prices will go up and smaller manufacturers which are not prepared to deal with such financial shocks will be affected.