End of the road for FAME-II drives up e2W, e3W demand

There has been a significant increase in queries, bookings, and sales of electric vehicles in the country, particularly in the two-and three-wheeler segments, even as EV manufacturers are in a bind over the likely end to subsidies under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-II) scheme after March 31.

- SHINE JACOB & SOHINI DAS

The central government provides incentives for the sale of electric two-wheelers, threewheelers, and four-wheelers under the FAME-II scheme, which is due to end in March. Subsidies under the scheme would be available for electric vehicles sold until March 31, 2024, or until funds are exhausted, according to officials from the Ministry of Heavy Industries.

The government has been reducing subsidies under the scheme; last June, the subsidy amount was reduced to 10,000 per kWh from 15,000 per kWh. The maximum subsidy cap of 40 per cent of the ex-factory price was also reduced to 15 per cent.

The Federation of Automobile Dealers Associations (Fada) is anticipating that the penetration of electric three-wheelers will cross the 60 per cent mark in March, from around 53.3 per cent in February. Similarly, the penetration of electric two-wheelers may increase from 5.7 per cent in February to 7 per cent in March, primarily due to the phasing out of the FAME-II scheme and subsequent price reductions by companies to clear inventory. The current penetration of electric commercial vehicles is around 1 per cent, and that of electric passenger cars is around 2.2 per cent.