2024 Electric Mobility Promotion Scheme Subsidy For Electric Bikes And Scooters Extended

The subsidy was introduced as a replacement for the FAME 2 subsidy. Initially, it was to be valid for 4 months but has been extended to 2 more months now

Quick News Highlights

- The subsidy was initially valid till July 31 but is now extended till September 30, 2024.
- The budget for the subsidy has been extended from Rs 500 crore to Rs 778 crore.
- However, there is a cap of Rs 10,000 subsidy per electric vehicle.

The Ministry of Heavy Industries (MHI) of India has extended the 2024 Electric Mobility Promotion Scheme (EMPS) for electric two and three-wheelers by another two months. The subsidy, introduced in March, was initially valid for four months, from April 1 to July 31, 2024. However, the central government has now extended the EMPS subsidy till September 30, 2024.

The government has increased the budget for the subsidy from Rs 500 crore to Rs 778 crore. Additionally, the number of electric two-wheelers eligible for the subsidy has been raised to 5,00,080, up from the previous 3,33,387 units. MHI is yet to reveal in-depth details about the budget breakdown for the amount of subsidies allocated for EVs. 

The extension of the EMPS electric vehicle subsidy will provide relief to the manufacturers and encourage potential buyers of new electric scooters or bikes. The EMPS 2024 was introduced earlier this year as a replacement for the FAME 2 subsidy. The subsidy covers Rs 5,000 per kWh of the vehicle’s total battery capacity, capped at 15 percent of the vehicle's factory price. In addition, EMPS has an extra cap of Rs 10,000 per electric vehicle. 

The criteria for the electric vehicle manufacturers to be included in the EMPS 2024 are as follows:

• The electric two-wheelers must be manufactured in India.
• The EV manufacturers must have local manufacturing and assembly plants for major components such as DC-DC converters, batteries, motors, and instrument consoles.
• The manufacturers should provide a warranty of at least 3 years or 20,000km, whichever comes first.

For now, the new EMPS subsidy reduces the cost of electric vehicles, but it's not a permanent solution. Without a long-term fix, the cost of electric vehicles could go up sharply, reversing the progress the country has made so far in adopting EVs. Later, when the subsidies end, giants like Bajaj and TVS may handle the impact better than relatively newer companies like Ather Energy, Ola Electric, Simple, and River, which are majorly dependent on subsidies for now.