Ranging from almost Rs 22,000 more for the Ola S1 Pro to as little as Rs 7,000 for the Ather 450X this is what the new proposed FAME subsidy could mean for electric two-wheelers after June 1, 2023.
Electric two-wheelers stand to become more expensive as the scheduled withdrawal date of the government's FAME II scheme on June 1, 2023 edges closer. At present, the FAME or the Faster Adoption and Manufacturing of Electric Vehicles and Hybrids allows for Rs 10,000 per kWh of the battery pack of the vehicles with a cap of 40 per cent of the value of the vehicle. As of now, with no extension of the FAME-II on the horizon or any word of a FAME-III to replace the present policy, this might be the end of subsidies for electric two-wheelers.

OEMs are now moving the government to either extend the policy or announce the terms of the FAME III to allow for sustained growth of the still nascent sector. Although no such policy has been announced as of yet, a meeting between government agencies and the 24 leading OEMs in space gives some insight as to how things may go forward.

One of the suggestions made by the OEMs was the leftover portion of the FAME II subsidies to the tune of Rs 1,500 crore extended to three and four-wheelers could be transferred to two-wheelers. The idea was later dropped when the Ministry of Heavy Industries realised that even with this, the subsidies would last less than two months at the present rate of purchase.

Reports suggest that a consensus has been struck between stakeholders and the government which reduces the cap on the subsidies to 15 per cent of the value of the vehicle, which means vehicle prices could rise as shown below.

While the move has so far been lauded by OEMs, it will be interesting to see how this new strategy reflects the way OEMs price and build their vehicles going forward.
Source - India Today