The Department of Heavy Industries on Friday issued a formal note of restructuring the Faster Adoption and Manufacturing of Hybrid and EV (FAME) scheme with a greater focus on electric two-wheelers. The revised scheme has increased the demand incentive for electric two-wheelers from Rs 10,000 kilowatt-hour to Rs 15,000 kilowatt-hour.
Earlier on Tuesday, CNBC-TV18 had reported that the department was working on remodelling the scheme.
Under the restructured scheme, the incentives on electric two-wheelers could increase from the current Rs 10,000 per kilowatt-hour, to about Rs 15,000 /kWh or even Rs 20,000/kWh – that’s by 1.5-2 times.
The government aims to reduce the price gap between the conventional IC engine two-wheeler and an electric engine two-wheeler by remodelling the policy.
So, this will be of huge significance for companies like Bajaj Auto, TVS and Hero-backed Ather that has electric two-wheelers in the market right now.
Tarun Mehta, CEO and Co-founder of Ather Energy praised the move. Speaking about the revision in policy, he said: “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.”
Ather Energy is an Indian electric vehicle manufacturing company and it sells two electric scooters – the Ather 450X and the Ather 450 Plus. The company has plans to expand distribution to 30 cities in the next 6 months and this increased subsidy will help accelerate consumer demand, immensely, Mehta told CNBC-TV18.
“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,” he added.
CNBC-TV18 has also learnt that the Centre could grant a two-year extension to the FAME scheme, which is set to expire in March 2022.
Watch the accompanying video of CNBC-TV18’s Parikshit Luthra for more details.