Electric two-wheeler companies believe that the government has taken a ‘great step’ by increasing the subsidy on such vehicles by 50 percent under FAME II. This will be a dice-turning step to increase the acceptability of eco-friendly vehicles in the country.
The government on Friday made partial amendments in the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India II) scheme. Under this, the demand incentive for electric two-wheelers has been increased to Rs 15,000 per kWh. Earlier there was a uniform subsidy of 10,000 per kWh for all electric vehicles. These include plug-in hybrid and strong hybrid. Although buses are not included in this.
Under the latest amendment, the Ministry of Heavy Industries has capped the incentive limit for electric two-wheelers to 40 per cent of the vehicle’s cost. Earlier this limit was 20 percent.
Tarun Mehta, Chief Executive Officer (CEO) and Co-Founder, Ather Energy, said in a statement, “The subsidy has been increased by 50 percent per kWh through amendment in the FAME-II policy. This is a wonderful step. The sales of electric two-wheelers have increased continuously even amid the pandemic. After this additional subsidy, we expect tremendous growth in this market. We estimate that by 2025, the sales of electric two wheelers will exceed 6 million units.
He said that the government is constantly emphasizing on increasing the acceptability of electric vehicles. Under this, emphasis is being laid on manufacturing of electric two-wheelers at the local level. With this, India can become a manufacturing center of electric vehicles.
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV), said, “This is an important decision taken by the government. This will bring down the price of electric two-wheelers at par with internal combustion engine vehicles. This will remove the biggest bottleneck of very high prices of electric two-wheelers.” He said, “Now the City Speed Electric Scooter’s price with 100 km/per charge will be less than Rs 60,000. At the same time, the price of a high-speed scooter with a range of 80 km will sit around one lakh rupees.
Rahul Sharma, founder of Revolt Motors, said that the amendment in FAME II will be a game changer. “With increased financial incentives, the acceptability of products in this category will increase. This reflects the government’s commitment to the electric vehicle industry.
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