Department Of Heavy Industries Revises FAME II Incentives For Electric Two Wheelers
Just as the Industry get back to work from COVID Second Wave lockdown, the Department of Heavy Industries (DHI) came out with revisions to the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles II (FAME II) Scheme late Friday evening.
The revision states, the incentive on Electric Two Wheelers is being upped from Rs 10,000 per kWh to Rs. 15,000 per kWh. DHI further increased the limit on the incentives for an e-two-wheeler, which is now capped at 40 percent of its price. In simple words – Any Electric two-wheeler with a 1kWh battery will eligible for a discount of Rs 15,000, ones with a 2kWh battery will be eligible for a subsidy of Rs. 30,000.
Mr Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles ( SMEV), speaking on revised FAME II scheme opined "It’s an important and admirable decision taken by the government, a move that will bring down the prices of electric two wheelers nearer to the IC vehicles and remove one of the biggest blockades of the high sticker price of electric two wheelers. A City Speed electric scooter with a range of 100km/charge will now cost less than 60000 and a high-speed scooter with a range of 80 km will come nearer to the price tag of Rs.1 lac. 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 of electric two-wheelers. 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 5 years."
Ather Energy has passed on the benefits to its new customers by announcing a reduction of Rs 14,500 on the Ather 450X.
According to Anant Jain, Head of Market Intelligence – India, GfK, “The recent announcement by the government is expected to further motivate the customers to adopt electric vehicles. There are various factors which is driving this shift in preferences, however, low operating costs of EVs and soaring fuel prices motivate buyers to consider more fuel-efficient alternatives. The increasing levels of awareness on EV technology among young consumers is likely to accelerate the growth and adoption of EVs across product segments.”
Tarun Mehta, CEO and Co-founder Ather Energy said “The revision in the FAME policy, increasing the subsidy by 50% per KWh is a phenomenal move. 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+ units by 2025. 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.”
Prices of all other existing electric scooters are expected to witness a substantial drop soon.
“The recently announced modification in the FAME India Phase 2 scheme will prove to be a game changer. The increase in financial incentive will further help in boosting adoption of products in the category and is a reinforcement of government’s commitment and intent for the EV industry. We are very pleased with this development as Revolt plans to reopen booking and further expand into newer markets. Such interventions coupled with the ongoing focus on infrastructure development can accelerate the growth of the sector immensely.” said Mr. Rahul Sharma, Founder, Revolt Motors
India’s electric two-wheeler market is steadily getting traction, the rising costs of fossil fuels and the pandemic-induced lockdown has added fuel to the fire and more players are set to enter the fray soon. Ola Electric has already announced the world’s largest electric two-wheeler factory and its first e-scooter is due for launch in the coming months.
"Lowering the prices of electric scooters in the country will really help to persuade more riders to switch from a combustion-engined model to an electric one. We have always emphasized the importance of creating an ecosystem for EV mobility, and this new revision to the FAME II scheme is an important step in that direction," said Mr. Jeetender Sharma, MD & Founder Okinawa Autotech on the recent announcement by the government on the revision of FAME II.
