The Indian government will implement a reduction in the FAME-II subsidy (Faster Adoption of Manufacturing of Electric Vehicles in India) for electric two-wheelers from next month.
As per a notification issued by the Ministry of heavy industries, the subsidy for electric two-wheelers will decrease from Rs 15,000 per kWh to Rs 10,000 per kWh.
Additionally, the cap on incentives will be lowered from 40% to 15% of the ex-factory prices of vehicles. This notification will be effective from June 1, 2023, and will apply to all electric two-wheelers registered on or after that date.
This change is expected to result in increased prices for electric two-wheelers in India.
On this, Mr Nikhil Bhatia, Co-Founder & Chief Operating Officer of HOP Electric Mobility, said, “There was a need to have a more pragmatic approach to the long-term advancement and sustenance of the electric vehicle segment. Phasing out the subsidies is a forward-looking move, and it’s time now that the dependence on subsidies is done-away-with gradually. Subsidies are no longer needed for the electric two-wheeler industry to thrive, and reducing and eventually removing the FAME II subsidy is a welcome step in the right direction. It is time EV stands on its own and we are ready for it.”