2024 Electric Mobility Promotion Scheme Announced For Electric Two-Wheelers, Replacing FAME 2 Subsidy

The subsidy will only be available for four months, from April 1 to July 31st, 2024

In recent years, electric vehicles have become very popular in India, thanks to the big boost from the FAME 2 (Faster Adoption and Manufacturing of Electric Vehicles) scheme. The FAME 2 scheme offered subsidies to electric and hybrid vehicles, contributing to their growing adaptability in the country. But these subsidies are ending on March 31, 2024. To deal with this, the central government has announced a new plan called the Electric Mobility Promotion Scheme 2024 (EMPS). However, it is a short-term plan and will only be valid for four months, from April 1st to July 31st, 2024.

Under the EMPS 2024 plan, the government has set aside Rs 500 crore for electric two-wheelers and three-wheelers. Out of which, approx Rs 333.39 crore will be available to support up to 3,33,387 vehicle sales over four months. The subsidy for electric two-wheelers will be Rs 5,000 per kWh of battery capacity, capped at 15 percent of the vehicle's factory price. The maximum cap remains the same as compared to the FAME 2 scheme, but the subsidy per kWh is now half; as FAME 2 offered Rs 10,000 per kWh. Moreover, there's an extra cap of Rs 10,000 per electric vehicle under EMPS. This means that the EV prices will likely go up from April 1, 2024.

Criteria for EV manufacturers to be included in EMPS 2024 include:

• Electric two-wheelers must be manufactured in India.

• EV manufacturers must have local manufacturing and assembly plants for components such as DC-DC converters, batteries, motors, instrument consoles, etc.

• The vehicle warranty must be at least 3 years or 20,000km, whichever comes first.

The new EMPS subsidy helps keep electric vehicle costs down for now, but it's not a long-term fix. Without a permanent solution, electric vehicle prices could go up significantly, reversing the progress we've made in adopting EVs. Bigger companies like Bajaj and TVS might cope better than smaller ones like Ather Energy, Ola Electric, Simple, River, etc which highly rely on subsidies.

Ather Energy is launching its family-focused e-scooter named - Ather Rizta, on April 6, and they are probably waiting for the new subsidies before deciding its price.