Two-wheeler EVs to get expensive from June 1 as government cuts FAME II subsidy
The total outlay for FAME Scheme Phase II is ₹10,000 crore to provide incentives to buyers (end users or consumers) of electric vehicles to enable wider adoption, which may be encouraged as a purchase price.
PremiumThe government has reduced the subsidy provided under FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme applicable on electric two-wheelers registered on or after June 1, 2023, according to a notification by the ministry of heavy industries. For the electric two-wheelers, the demand incentive will be ₹10,000 per kWh.
The cap on incentives for electric two-wheelers will be 15 per cent of the ex factory price of vehicles from the current rate of 40 per cent. Earlier this month, a stakeholders' meeting with 24 electric two-wheeler OEMs registered under FAME-II was called and the consultation reached a consensus that the demand incentive may be kept at ₹10,000 per kWh of battery capacity, along with the 15 per cent price cap.
Most two-wheeler OEMs expressed that the subsidy should continue for a longer period even if it is slashed. So, a consensus emerged to reduce the subsidy to 15 pc for two-wheelers, which will stretch the scheme till February-March.
Union Minister of Heavy Industries Mahendra Nath Pandey said that as the demand for e-two-wheelers continues to grow, the government is committed to providing the necessary support to the industry to ensure sustainable growth and reduce carbon emissions.
The FAME India scheme commenced on April 1, 2019, for a period of three years, which was further extended for two years up to March 31, 2024. It is aimed to incentivize buyers of electric vehicles to enable wider adoption, which may be encouraged as a purchase price.
The total outlay for FAME Scheme Phase II is ₹10,000 crore to provide incentives to buyers (end users or consumers) of electric vehicles to enable wider adoption, which may be encouraged as a purchase price.
The scheme is exclusively for public and commercial transport in the segments of electric three-wheelers (e-3W), electric four-wheelers (e-4W), and electric buses. The benefit of the incentive is available to privately-owned registered electric two-wheelers.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
