Plan to Buy an Electric Scooter? Read About Slashed Subsidy as Govt Amends FAME II Scheme from June 1

Reduction of the maximum subsidy ceiling from 40 per cent to 15 per cent and that on electric two-wheelers from the current Rs 15,000 per kWh to Rs 10,000 per kWh are among the demand incentives modified by the Ministry of Heavy Industries under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme.

According to a notification issued by the ministry, the adjustment will take effect on June 1 this year and will be applicable to any electric two-wheelers registered on or after that day.

The scheme was approved with an outlay of Rs 10,000 crore for a period of three years commencing from April 1, 2019, with an aim to create a nationwide demand for electric 2 and 3-wheelers, 4-wheeler passenger cars and e-buses.

The Union Minister of Heavy Industries Mahendra Nath Pandey underscored the government’s commitment to assisting the industry in achieving sustainable growth and lowering carbon emissions while there is an uprising demand for electric 2-wheelers. He believes that this step will benefit both the environment and the economy, making it stronger and more robust.

However, after the recent changes in the scheme, it is believed that while this will create a strong EV ecosystem in the country, the growth rate for electric 2-wheeler sales may decline slightly due to higher prices. This amendment may also lead to OEMs making fast decisions to release stripped-down versions of their products in order to maintain market dominance.

According to JMK Research & Analytics, India witnessed five launches of EVs in the month of April that included an electric bicycle, an electric scooter, an electric 2-wheeler cargo, an electric passenger vehicle, an electric 3-wheeler cargo and an electric car.

As per the monthly report, overall EV sales in April decreased by 21 per cent year on year to 1,10,503 units. Despite that, electric two-wheelers and passenger-type electric three-wheelers drove EV registrations in April 2023, accounting for 90.48 per cent of all registrations in the month.

In the last month, while UP, Maharashtra, Karnataka and Gujarat remained the top-performing states in terms of EV adoption in the country, with 21,845 units sold, Ola Electric emerged as the top player. Meanwhile, Ampere surpassed TVS Motors to take the second position, while the latter and Ather came in third and fourth place, respectively.

According to the Vahan portal, sales of electric 2-wheelers have reached roughly 39,000 units so far in May.