Price hike for electric scooters effective from June 1: Here's the reason

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Price hike for electric scooters effective from June 1: Here's the reason (Image:
Price hike for electric scooters effective from June 1: Here's the reason (Image:

Delhi : From June 1, the price of electric scooters will increase due to a reduction in the government subsidies. The government's FAME (Faster Adoption of Manufacturing of Electric Vehicles in India) programme, which is in its second phase, provides subsidies to the makers of electric two-wheelers. However, the Ministry of Heavy Industries has announced that the FAME II scheme's subsidy has been decreased from Rs. 15,000 per kWh to Rs. 10,000 per kWh. Additionally, instead of the present 40% that was being given up until now, the maximum subsidy under the plan has been set at 15% of the ex-factory cost.

The decision was made during a meeting between government representatives and 24 electric two-wheeler manufacturers earlier this month. The government claims that the FAME II programme would offer incentives to consumers of electric cars in order to promote their widespread adoption, which may be promoted as a purchase price. The programme is only for electric three-wheelers (e-3W), electric four-wheelers (e-4W), and electric buses that are used for public and commercial transportation.

A strong response was given by the Society of Manufacturers of Electric Vehicles (SMEV) to the government decision. It was stated that a rapid reduction in subsidies might cause a significant drop in EV adoption, having a long-term influence on the whole industry. According to SMEV Director General Sohinder Gill, "the ground reality is that the Indian market remains price-sensitive, and the total cost of ownership is not firmly established in consumers' minds."

According to Mr. Gill, there are less odds that consumers would pay more than 1.5 lakh just by accounting for the whole cost of ownership because the bulk of petrol two-wheelers cost less than 1 lakh. It was time for the EV industry to stand on its own, according to start-up players in the electric mobility field, who applauded the government's decision.

The government set up 10,000 crore for the three-year FAME II programme, which began on April 1 and gained a two-year extension in June 2021, bringing the program's effective date up to March 31, 2024. The government has no plans to start the third phase of FAME or prolong the subsidy through March 2024.