Electric Two-Wheelers To Get More Affordable As Government Amends FAME II Subsidies

In a bid to push for faster adoption and manufacturing of electric vehicles in India, the government has announced an amendment to the FAME II scheme for electric vehicles. Under the amendment, the government has increased subsidies on electric two-wheelers that will help bring down the prices by a significant margin. According to the notification issued by the Department of Heavy Industry, the incentive for electric two-wheelers has been increased to Rs. 15,000 per kWh, a hike of Rs. 5,000 per kWh from the older subsidy rate.

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Bengaluru-based Ather Energy is the first EV maker to announce a price reduction of Rs. 14,500 on the 450X, which is a massive drop. The benefit will extend to the Ather 450 Plus and the 450X offerings, which should now start around the Rs. 1.35 lakh mark (ex-showroom). Ather is yet to announce the new prices for its electric scooters. We also expect other electric two-wheeler players to share the new prices soon.

The government plans to induct more electric buses and three-wheelers across cities via EESL

The notification further states that the electric two-wheeler incentives will be up to 40 per cent of the vehicle cost. In addition to the subsidy on an electric two-wheeler, the government will also procure electric buses and three-wheelers on a large scale. The EESL has been directed to procure three lakh electric three-wheelers, which will be implemented in various segments. Furthermore, EESL will also aggregate demand for electric buses in nine major cities including Mumbai, Pune, Chennai, Kolkata, Surat, Ahmedabad, Delhi, Hyderabad, and Bengaluru.  

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Out of the Rs. 10,000 crore subsidy earmarked in the FAME-II scheme, two-wheelers are the largest beneficiary but are only applicable on those vehicles that qualify under the scheme. The electric scooters need to deliver a minimum range of 80 km on a single charge and have a top speed of 40 kmph with a 250 watt or higher electric motor.