Government Plans To Reduce Subsidies On Electric Two-Wheelers

While the Ministry of Heavy Industries intends to boost the expenditure for e-two-wheelers from the existing level of Rs 2,000 crore under its flagship FAME-II scheme, it also intends to reduce the subsidy per vehicle from 40% to 15% of the ex-factory price.

According to industry participants, reducing subsidies for electric two-wheelers is a backward move that would harm the market and slow adoption of electric mobility, resulting in reduced sales.

The fact is that the Indian market is price-sensitive, and total cost of ownership is not firmly entrenched in the minds of customers. With the majority of petrol two-wheelers costing less than Rs 1 lakh, there are less chances of consumer spending upwards of Rs 1.6 lakh factoring the total cost of ownership.

A gradual transition with sustained subsidies would have been ideal to ensure market growth and reach the international benchmark of 20 per cent EV market share. In the long run this may be a retrograde step leading to higher crude oil import bills and adding to the ever-increasing air pollution in most of the cities.

This is a Syndicate News Feed; edited by Clean-Future Team