Electric 2-wheeler subsidy cut under FAME-II scheme

In a move that'll raise the prices of electric two-wheelers in India from next month, the government has reduced FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) subsidy on electric two-wheelers from June 1, 2023.

In a notification issued by the ministry of heavy industries on May 19, 2023, the incentive on electric two-wheelers has been reduced to ₹10,000 per kWh from the existing ₹15,000 per kWh. The cap on incentives for electric two-wheelers will be 15% of the ex-factory prices of vehicles against 40% earlier, the notification adds.

The notification will come into effect from June 1, 2023, and apply to all electric two-wheelers registered on or after June 1, 2023.

The EV sales had risen to the highest at 85,793 units in March 2023. The Centre had sanctioned ₹800 crore under the FAME Scheme Phase II for 7,432 public fast charging stations in March 2023.

Union Minister of Heavy Industries Mahendra Nath Pandey had announced the sanction of ₹800 crore under FAME II to the PSU oil marketing companies (OMC) -- Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) -- for setting up 7,432 public fast charging stations across the country.

The central government committee had recommended certain changes to improve the viability of the development of public charging infrastructure. It includes supporting the upstream infrastructure such as distribution transformer, LT & HT cables, AC distribution boxes, circuit breakers/isolators, protection equipment, tubular or PCC mounting structures, fencing, and civil work. These generally cost up to 60% of the overall cost of setting up a Public EV charging station.

The installation is expected to be completed by March 2024. At present, there are about 6,586 charging stations across the country. The addition of the new 7,432 public charging stations will be a significant push to the EV charging ecosystem. This will be used for charging electric two-wheelers, four-wheelers, light commercial vehicles, and minibusses.

Additionally, the committee recommended a change in the configuration of charging guns to increase utilisation of charging capacity and reduce the cost of setting up of charging stations.

These moves were expected to boost the electric vehicle ecosystem in India and encourage more people to switch to cleaner modes of transportation.

The government data shows under Phase-II of the FAME Scheme, 8,82,967 electric vehicles were supported till February 15, 2022, by way of demand incentive, thus amounting to about ₹3,311 crore.

Further, the Centre has sanctioned 6,315 e-buses to 65 government entities for intracity and intercity operations across 26 states/UTs under the Scheme. The ministry has also sanctioned 2,877 charging stations in 68 cities and 1,576 charging stations across 9 expressways and 16 highways.