Electric two-wheelers will become costlier from June 1, 2023, as the government has decided to cut down the incentive from earlier 40 per cent of the EV's ex-showroom price to now 15 per cent of it, Autocar India (ACI) reported. The incentive cut is substantial and will certainly affect vehicle prices.
Moreover, the government has made changes to the FAME-II subsidy scheme cutting down the support from Rs 15,000 per kWh earlier to Rs 10,000 per kWh now, the report added.
According to a gazette notification issued on May 21, the Ministry of Heavy Industries (MHI) informed that these changes will be applicable from June 1, 2023, and not June 11, 2023, as communicated earlier.
The government earmarked Rs 10,000 crore for a period of three years under the FAME-II scheme. The scheme ended in June 2021 and was extended for a period of two years.
The scheme to provide Rs 15,000 per kWh instead of Rs 10,000 was introduced in June 2021. This was done to accelerate demand for electric two-wheelers. With this, the maximum cap of incentive was also increased from 20 to 40 per cent. The latest decision turns the clock back to what the scheme was two years ago. It also makes an additional five per cent cut on the maximum cap of EVs.
Citing data from the FAME dashboard, the ACI report said that so far, a total of 988,676 EV two-wheelers have been sold in India, as of May 22, 2023. The mandate for FAME-II was to provide subsidies for a million electric two-wheelers, 500,000 EV three-wheelers, 55,000 e-passenger vehicles, and 7,090 electric buses. The two-wheeler segment is very close to achieving the target of one million vehicles.
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Previously, the CEO of Ola Electric, Bhavish Agrawal had said that they are preparing for a market without any government subsidies. He said that they are conducting in-house research and large-scale manufacturing from day one to survive without government subsidies.