‘Revised subsidies to spur EV demand’

Electric two-wheeler makers on Saturday termed as “a phenomenal move” the government’s decision to increase subsidy for such vehicles by 50% under the FAME II scheme saying it would be a game changer in the adoption of eco-friendly vehicles.

The Centre had on Friday made a partial modification of the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II , including increasing the demand incentive for electric two-wheelers to ₹15,000 per KWh from an earlier uniform subsidy of ₹10,000 per KWh for all EVs, including plug-in hybrids and strong hybrids except buses.

In the latest modification, the department of heavy industries also capped incentives for electric two-wheelers at 40% of the cost of vehicle, up from 20% earlier.

“The revision in the FAME (II) policy, increasing the subsidy by 50% per KWh, is a phenomenal move,” Ather Energy CEO and Co-founder Tarun Mehta said in a statement. “Sales of electric two-wheelers have grown despite the pandemic and with this additional subsidy, we expect electric two-wheeler sales to disrupt the market, and clock 6 million-plus units by 2025,” he added.

The government’s continued support to drive adoption of EVs, with a keen focus on locally built electric two-wheelers will make India the manufacturing hub of EVs, Mr. Mehta added.

Lower sticker price

Society of Manufacturers of Electric Vehicles (SMEV) Director General Sohinder Gill said, “It’s an important and an admirable decision taken by the government, a move that will bring down the prices of electric two-wheelers nearer to the IC (internal combustion engine) vehicles and remove one of the biggest blocks, of the high sticker price of electric two-wheelers.” A ‘city speed electric scooter’ with a range of 100 km/charge will now cost less than ₹60,000 and a high-speed scooter with a range of 80 km will come nearer to the price tag of ₹1 lakh, he added.

“Together with the other important factors like extremely low running cost, low maintenance and zero emission, such price levels will surely spur a substantial demand for electric two-wheelers,” Mr. Gill said.

“We believe the time has come for mass adoption of electric two-wheelers and such initiatives coupled with a mass awareness campaign by the government and easy terms financing by public sector banks will bring us closer to the target of 30% of the two-wheeler market becoming electric in five years,” the SMEV DG added.