New Delhi, May 22 (PTI) The government has reduced the subsidy provided under FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme. It will applicable on electric two-wheelers registered on or after June 1, 2023.
In a move that has recently caught the attention of electric vehicle enthusiasts and industry stakeholders alike. The government has announced a reduction in the subsidy limit for electric 2-wheelers. Previously set at 40 per cent, the new subsidy cap will now stand at 15 per cent.
This change is expected to impact the electric vehicle market in the country significantly. The Heavy Industries Ministry notified the changes. For electric two-wheelers, the demand incentive will be Rs 10,000 per kWh. The cap on incentives for electric two-wheelers will be 15 per cent of the ex-factory price of vehicles from 40 per cent. As the electric vehicle market has matured and gained traction, it has become necessary to reassess the subsidy structure.
The reduced subsidy limit means that the upfront cost of buying an electric vehicle will now be higher. Previously, the subsidy helped offset a significant portion of the vehicle’s price. It makes it more affordable for consumers. Now, buyers will need to give in a larger share of the vehicle’s cost into their budget.
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Electric vehicle manufacturers and industry players will undoubtedly be affected by the subsidy reduction. The lower subsidy limit may result in a temporary decline in demand for electric 2-wheelers. While the initial cost for the consumers goes up. This adjustment aims to drive sustainable growth, encourage technological advancements, and promote a more competitive industry.
It’s important to note that despite the reduction in subsidies, electric 2-wheelers still offer several advantages over their conventional counterparts. Electric vehicles are more energy-efficient, environmentally friendly, and have lower operating costs in the long run.
Additionally, they often benefit from lower maintenance requirements and longer lifespans. These factors may still make electric two-wheelers an attractive option for many consumers.
