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Electric scooter companies divided on impact of FAME II subsidy cutback

However, premium electric scooter players feel that the market will consolidate with the premium end dominating the play

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However, another leading electric scooter company had an opposite view. It said the drop in subsidy would impact sales only for a few months

4 min read Last Updated : May 18 2023 | 10:58 PM IST

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Leading electric scooter companies are divided on the extent to which sales will be impacted on account of the reduction of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME II) subsidy by a third on each scooter. However, many players concede that the decision will help them rejig their plans and cut costs in the next 12 months, and prepare for a world that will be without subsidy from April 2024.

The Centre on Wednesday decided to slash the FAME II subsidy on electric two-wheelers to Rs 10,000 per Kwh from the existing Rs 15,000 per Kwh. The maximum subsidy cap of 40 per cent of the ex-factory price of the vehicle has also been brought down to 15 per cent.

Raising concern about the government’s move, Hero Electric CEO Sohinder Singh Gill said, “This will surely impact sales and force many who wanted to buy an electric vehicle to defer their decision or stick to ICE (internal combustion engine vehicles), leadi