FAME II policy electric vehicle, FAME II Policy Amendments for Electric two wheelers

Electric vehicle manufacturers welcomed the central government’s changes to the FAME II policy electric vehicle.

As part of the major changes in the current FAME II policy, the Ministry of Heavy Industry announced an increase in the production of two-wheel electric vehicles in India. The previous subsidy standard for two-wheeled electric vehicles was 10,000 rupees per kilowatt-hour, and now it is 15,000 rupees/KWh.

The government hopes to promote the use of electric two-wheelers in the country. Currently, most electric vehicles are about 20,000 rupees more expensive than their ICE counterparts. Such price cuts will certainly help the popularization of electric vehicles and plans. The first company to announce a substantial reduction of the Rs 14,500 subsidy for its flagship 450X electric scooter said it will reveal more details soon.

Here. If you think that’s all there is to it, then this is far from the case. These changes also ensure that the performance cap of electric two-wheelers is as high as 40% of the vehicle’s value. The central government will also purchase electric buses and large tricycles.

Three million electric rickshaws are used in various fields. EESL was commissioned to bring together the demand for electric buses in nine major cities: Pune, Surat, Mumbai, Ahmedabad, Chennai, Kolkata, Hyderabad, Delhi, and Bangalore. Currently, Gujarat, Delhi, and Nagpur have the most electric buses.

Allegedly, these buses have a cruising range of more than 200 kilometers and are equipped with replaceable batteries, so they can drive all day without charging. The notice also pointed out that the government will purchase electric tricycles for various purposes through EESL. This is good news for players such as Mahindra Electric and Euler Motors who have transactions in this area.

Here’s how the industry reacted to the revision of the FAME II policy

Tarun Mehta, CEO, and co-founder of Ather Energy said:

“The revision of the FAME Directive has increased the subsidy per kilowatt-hour by 50%. This is an extraordinary step. Sales of two-wheeled electric vehicles have risen despite the pandemic and this extra subsidy, but we expect that the sales of two-wheel electric vehicles will disrupt the market, and there will be more than 6 million registrations by 2025.

Ather Energy has plans to expand sales to 30 cities in the next 6 months, and the increased subsidies will continue to support The government introduced electric vehicles, focusing on local electric two-wheelers, and made India a center for electric vehicles production.

Jitender Sharma, Managing Director and Founder of Okinawa Autotech, said

“The E2W industry once again feels a positive sentiment and high attention of the Indian government. The Indian government has completely reformed the FAME II policy. This is a welcome move. Solo will increase his Enthusiasm for the adoption of electric vehicles.

In fact, lowering the price of electric scooters in the country will help persuade more motorcyclists to switch from internal combustion engines to electric vehicles. We have always emphasized the importance of establishing an electric vehicle ecosystem. Mobility and The complete reform of the FAME II program is an important step in this direction.

Sudarshan Venu, Joint Managing Director – TVS Motor Company said

“We welcome the government’s continued support to EVs. Sustainable mobility solutions are very important for the future and TVS is investing significantly behind this. The improved incentives for electric two-wheelers will increase penetration. Such policy direction should lead to the indigenous development of future technology.”

Rahul Sharma, Founder, Revolt Motors, said

“The recently announced modification in the FAME India Phase 2 scheme will prove to be a game-changer. The increase in financial incentive will further help in boosting the adoption of products in the category and is a reinforcement of the government’s commitment and intent for the EV industry.

We are very pleased with this development as Revolt plans to reopen booking and further expand into newer markets. Such interventions coupled with the ongoing focus on infrastructure development can accelerate the growth of the sector immensely.”

Sohinder Gill, Director General – Society of Manufacturers of Electric Vehicles (SMEV), said

“It’s an important and admirable decision taken by the government, a move that will bring down the prices of electric two-wheelers nearer to the IC vehicles and remove one of the biggest blockades of the high sticker price of electric two-wheelers.

A city speed electric scooter with a range of 100 km/charge will now cost less than ₹ 60,000 and a high-speed scooter with a range of 80 km will come nearer to the price tag of ₹ 1 lakh. Together with the other important factors like extremely low running cost, low maintenance, and zero-emission, such price levels will surely spur a substantial demand for electric two-wheelers.

We believe the time has come for mass adoption of electric two-wheelers and such initiatives coupled with a mass awareness campaign by the government and easy terms financing by public sector banks will bring us closer to the target of 30 percent of the two-wheeler market becoming electric in 5 years.

Commenting on the announcement, Uday Narang, Chairman – Omega Seiki Mobility said

“This revolutionary step by the government to subsidize electric three-wheelers, two-wheelers, passenger vehicles, and buses will provide the much-needed impetus in faster adoption, thus helping greatly in building up the ecosystem of EVs in India. We at Omega Seiki Mobility strongly support this initiative.

It is a major incentive for Make-in-India local manufacturers like us, enabling us to bring more and more EVs of various segments to the country. This will notably make India a significant player in the EV Industry”

Final Words

Speaking on the announcement, Saurav Kumar, Founder, and CEO – Euler Motors, said

“The decision to extend the FAME II scheme will be incremental to push EV adoption in the country. The FAME subsidies have helped EV manufacturers to build efficient and advanced vehicles in the last three years.

However, the strict stipulations of the scheme have limited the OEMs to avail of its benefits. Given the slow uptick of EVs, the relaxations and revisions in the scheme will ensure OEMs can continue to offer the vehicles at a subsidized cost and cultivate a larger market for electric vehicles.”

There hasn’t been anything specified for electric cars at present. The country has seen only a few electric passenger cars till now. However, luxury carmakers are ensuring that they bring in Rs 1 crore plus price tag EVs here. Prime amongst them are Jaguar Land Rover, Mercedes-Benz, and soon, Audi India.

Tesla will be launching its cars soon and these are high on the desirability list. Whether or not the government doles out additional incentives for e-cars just like the FAME II Policy, is something we will have to wait and watch.

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