Mrunal Manmay Dash

India’s electric two-wheeler (E2W) industry is now facing its tallest hurdle yet, with a substantial price hike in the offing, thanks to a reduction in The Faster Adoption and Manufacturing of hybrid & Electric vehicles Phase II (FAME II) subsidy.

Originally, Rs 2,000 crore was set aside by the Central government for E2W industry. As per reports, with 80 percent of the targeted one million EV 2-wheelers already having received this subsidy, the government has slashed this subsidy to Rs 10,000 per kWh of battery capacity with an upper cap of 15 percent of the ex-factory price of the vehicle.

So currently, while subsidies ranged from Rs 17,000 to Rs 66,000 depending on the battery capacity and price of the 2-wheeler, now, the subsidy is expected to go as low as Rs 15,000 to Rs 20,000 for the same vehicles, forcing all your favourite electric scooters to get a significant price hike.

As per a Car & Bike report, in order to ensure subsidy support isn’t withdrawn entirely (and abruptly) in a way that hurts the industry, the heavy industries ministry has decided to allocate an additional Rs 1,500 crore to E2Ws from the unutilised funds allocated for electric three- and four-wheelers under the scheme.

However, the subsidy structure has been revised, which will lead to a substantial increase in E2W prices from June 1, 2023.

Expected subsidy difference in your favourite e-scooters:

For the Ather 450X (which qualified for an incentive of up to Rs 55,000 so far), the subsidy will drop by approximately Rs 32,500. The reduction in subsidies for Ola’s S1 and S1 Pro will be Rs 22,000 and Rs 37,000, respectively. Tork’s Kratos R, too, will witness a subsidy reduction of Rs 37,500, with the Hero Vida V1’s incentives slashed by Rs 28,500 to Rs 37,500.

Models equipped with comparatively smaller batteries, such as the TVS iQube and Bajaj Chetak, will see their subsidies drop by Rs 28,500 and Rs 22,500, respectively.