Electric two-wheelers may see the end of subsidy soon | Dorleco

Electric two-wheelers may see the end of subsidy soon

NEW DELHI: The government’s unwillingness to implement the third phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME III) scheme, which is being promoted by the heavy industries ministry in response to demand from domestic producers, means that the subsidy for electric two-wheelers is expected to expire in a few weeks.

Even though the finance ministry had been against the plan, North Block’s hesitation makes sense to other government branches as well.

The demand for electric two-wheelers had decreased when the government reduced the subsidy earlier this year, but it now appears to be stabilizing. As a result, government officials have argued that the switch to cleaner fuels will happen naturally because of the economics of operating them despite their higher capital costs.

The government hopes to see about 10 lakh two-wheelers receive the subsidy by the time FAME II, which is open to two-, three-, and four-wheelers used for public transportation, concludes in a few weeks. This is after money was reallocated in response to demand from local players. A total of Rs 10,000 crore was allocated to the initiative.

The Ministry of Heavy Industries had chosen a more ambitious plan, but it hasn’t gained any traction yet. The government’s desire to move forward with a third phase coincides with plans to launch a new initiative to entice luxury electric vehicle manufacturers, like Tesla and others, to produce in India for both local and international markets.

The government is currently debating the idea, which might resemble a phased manufacturing plan or an incentive system tied to production. Furthermore, a decision to reject any further financing may have been prompted by some of the companies’ FAME violations.

The demand for electric two-wheelers has increased in the south and west of the nation, but it is still low in the north and east. The makers of these companies are hoping that a new lease on life will enable these vehicles to have a larger pan-Indian footprint at a time when significant resources are being allocated to building charging infrastructure and public awareness.



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