[TusharK]

According to media reports, the government is not keen on introducing the third phase of the "Faster Adoption and Manufacturing of Electric Vehicles" or FAME III. As a result, the subsidy on electric 2-wheelers could end in the coming weeks.



The report states that the finance ministry has opposed the proposal submitted by the heavy industries ministry. The government expects the transition to cleaner-fuel vehicles to happen naturally despite the higher capital cost.

The government had allocated Rs 10,000 crore for the FAME II scheme, which will end in the next few weeks. Around 10 lakh 2-wheelers are expected to benefit from this scheme.

The government is now looking at a new scheme to encourage high-end electric car makers like Tesla to manufacture in India. It could be similar to the production-linked incentive (PLI) scheme.

Source: ET Auto

Link to Team-BHP News

[Revvatron]

Is this the same as the subsidy they were giving? I think that already ended or was it only for 4 wheelers?

[Nikhildrao]

Well this does not bode well for the EV start-ups if the price went up by another 20k. Only Ola will survive because of economy of scale. The legacy makers can chug on with the iQube and Chetak , only time will tell.

[SmartCat]

The look on the face of "Vice President - Activa Sales", HMSI:

[arpan_spark]

Subsidies were good to spurr initial adoption. I think retail subsidies are no longer required. We need more of production subsidies and RnD subsidies so that we can make and sell in India and globally. Retail subsidies hide costs for end user. For example - Ather scooter battery replacement costs ₹80-90k. So, a person may be happy to buy a nice scooter which vosts around ₹1.5l after subsidies. But the sticker shock of battery replacement after warranty would be too high. Agreed that batteries are not often replaced, but in case of such an unfortunate situation, it will be disaster. Retail subsidies only reduce the battery cost of the initial vehicle. PLI style schemes in theory should reduce battery costs of all batteries uniformly.

[sri_tesla]

The incentives given for electric vehicles (2 and 3-wheelers and cars) in India are substantial and one of the best in the world.

• Huge amounts of direct cash subsidies for 2-wheelers and 3-wheelers. Rs 15,000 per kWh battery capacity is a very good amount.

• Just 5% GST on all types of electric vehicles compared to 30 to 50% GST on petrol/diesel vehicles. This alone should bring in price parity at current volumes (5K cars for Tata, 10 to 20K per month 2-wheelers for Ola, TVS, Bajaj, and Ather).

• Recently introduced PLI schemes for electric vehicles and battery manufacturing will cover a substantial amount of costs for the automakers who are investing in local manufacturing.

• In addition to the above central govt subsidies and schemes, many state govts are waiving road tax and some are even giving additional subsidies as well.

Till now almost 1 million 2-wheelers are sold under the subsidy schemes. Many major companies like Ola, TVS, Ather, and Bajaj have sold at least 1 lakh to 3 lakh vehicles cumulatively. Also, the remaining incentives (very low GST, PLI schemes, road tax waivers, etc...) will continue for some more time. If companies are not able to sustain despite all these, I don't think they ever will. They will want to receive these generous subsidies as long as possible obviously.

When the govt reduced the subsidy amount from 40% of the ex-showroom price to 15% in the middle of the year, most of the companies reduced the prices to cover those amounts. In fact, the prices of many models (Chetak, Ola, Vida, etc...) are even lower now compared to before due to competition. Total monthly sales also quickly bounced back to the previous levels.

[ohaak]

It might be more meaningful to focus on electrifying two-wheelers and three-wheelers, along with public transport systems like buses and trains, as a first step in the transition to electric vehicles (EVs) in India. This approach could potentially offer more immediate and widespread benefits both to consumers and the government. Since the nation predominantly relies on internal combustion engine (ICE) two-wheelers, transitioning these to EVs could have a significant impact. Additionally, prioritizing domestic EV products, even if they are more expensive, could help reduce dependence on cheaper imports and foster local industry growth. The shift towards electric cars, which are currently at a premium price point, can be a subsequent phase in India's EV revolution. I feel it is too early to stop the subsidy for EV 2 wheelers.

Production:

Total production of Passenger Vehicles**, Three Wheelers, Two Wheelers and Quadricycles in April 2022 - January 2023 were 2,09,95,875 units.

Domestic Sales:
Passenger Vehicles** sales were 31,69,788 units in April 2022 - January 2023
Three-wheeler sales were 3,84,026 units in April 2022 - January 2023
Two-wheeler sales were 1,34,41,873 units in April 2022 - January 2023

* BMW, Mercedes, Tata Motors & Volvo Auto data is not available
** BMW, Mercedes & Volvo Auto data is not available, Tata Motors data is only available for Apr-Dec

Source:SIAM press release