Starting from June 1, 2023, the Indian government has implemented a reduction in the FAME-II subsidy for electric two-wheelers, resulting in an upsurge in their prices. A recent government notification states that the subsidy per kilowatt-hour (kWh) for electric two-wheelers has been decreased from Rs 15,000 to Rs 10,000. Additionally, the cap on incentives has been revised down to 15% of the ex-factory price, compared to the previous limit of 40%.
These alterations will exclusively affect electric vehicles registered on or after June 1. The second phase of the FAME-II initiative was launched on April 1, 2019, with a total budget allocation of Rs 10,000 crore for a span of three years. The progression of electric vehicle adoption in India, primarily in the domain of two-wheelers, has been driven by these subsidies in conjunction with the escalating costs of conventional fuels.
Notably, in the fiscal year ending on March 31, 2023, electric vehicle sales in India surpassed the remarkable milestone of one million units for the first time. Among these sales figures, two-wheelers constituted a significant share, accounting for 62% or 726,976 units, as supported by data from the Society of Manufacturers of Electric Vehicles.
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