The Indian government has been at the forefront of promoting sustainable transportation through various initiatives, with one of the most prominent being the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) subsidy scheme. Designed to encourage the adoption of electric vehicles (EVs), this scheme has been a significant driver in making EVs more affordable for consumers. However, recent developments in the subsidy structure have left potential buyers questioning the current incentives for purchasing EVs.
Previous Incentives: Boosting EV Adoption
Under the earlier version of the FAME-II scheme, the government offered substantial subsidies to individuals buying EVs. Buyers enjoyed a subsidy of Rs 15,000 per kilowatt of battery capacity, with a cap of 40% of the vehicle’s cost for two-wheelers. Moreover, two-wheeler electric vehicles (e-Vs) were eligible for an additional 50% incentive. This comprehensive incentive package made EVs an attractive choice for many.
Current Discounts: A Change in the Landscape
However, the EV subsidy landscape has undergone significant changes. In June, the government revised the FAME-II subsidy scheme, resulting in a reduction in the subsidies available to buyers. The revised subsidy structure primarily affects electric two-wheelers registered on or after June 1, 2023. Under the new guidelines, the demand incentive for electric two-wheelers has been reduced to Rs 10,000 per kilowatt of battery capacity.
To put it into perspective, if you had purchased a 3 kW electric two-wheeler before the subsidy revision, you would have received a discount of Rs 45,000. With the recent changes, that discount has now been reduced to Rs 30,000. Consequently, individuals purchasing a 3 kW electric two-wheeler will need to pay an additional Rs 15,000 compared to earlier buyers.
The Indian government’s commitment to promoting electric vehicles remains steadfast, as evident through initiatives like the Revised FAME-II subsidy scheme. However, the recent subsidy reduction for electric two-wheelers has altered the cost dynamics for prospective buyers. As a result, potential buyers are advised to consider these changes and make informed decisions when investing in electric mobility.
