If you want to accelerate up with Electric two-wheeler, if you’re planning to buy an electric two- wheeler(E2W) in India. Hurry up the price is going to hike from 1st June 2023.
FAME-II subsidy cuts to push up prices of electric two-wheelers
The government has slashed the incentive benefits for E2Ws under the FAME II scheme from June 1, 2023.
This means that E2Ws will come more costlier by around Rs 25,000 to Rs 35,000. FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles). It’s a scheme launched by the government in 2019 to promote the development and adoption of electric vehicles in India. The scheme provides impulses for buyers and manufacturers of electric vehicles grounded on the battery capacity and cost of the vehicle. In June 2021, the government had increased the subsidy quantum from Rs 10,000 per kWh to Rs 15,000 per kWh and the maximum cap on the vehicle cost from 20 to 40. This had redounded in a boost in demand for E2Ws, which reckoned for about 61% of the total electric vehicles sales.
What you need to know about the FAME-II subsidy cut and its impact on electric two-wheeler prices
In a recent announcement, the Ministry of Heavy industries (MHI) has revised the subsidies quantum back to Rs 10,000 per kWh and the maximum cap to 15. The announcement also states that these emendations will come into force from June 1, 2023. The government has not given any reason for this unforeseen rollback of the subsidy benefits.
The impact of this decision will be felt by both the consumers and the manufacturers of E2Ws. The prices of popular E2W models similar as Ola S1 Pro, Ather 450X, Hero Vida V1 Pro and TVS iQube will go up by Rs.15000 to 20000.
How the FAME-II subsidy cut will impact the price of electric two-wheelers
For illustration, suppose any EV 2-Wheeler, which presently costs Rs 125,000, may bring over Rs Approx 155,000 by June. Some of the E2W manufacturers have expressed their disappointment and concern over this move. They’ve said that it’ll affect the growth and competitiveness of the electric mobility sector in India. They’ve also said that they will try to minimize the impact on the guests by espousing cost- saving measures and productivity advancements.
On the other hand, some of the manufacturers have also said that they’re set to operate without subsidies in the long run. They’ve said that they’re investing in in- house technologies and large- scale manufacturing to reduce their dependence on government support. They’ve also said that they’re confident of meeting the client demand and prospects despite the price hike.
The FAME II scheme is listed to end on March 31, 2024. It isn’t clear whether the government will extend it or introduce a new scheme after that. still, it’s clear that the electric two- wheeler member in India is facing a major challenge due to this unforeseen policy change.
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