Electric Scooters To Get Expensive From June 1. Here's Why

The government offers subsidy on electric vehicles under the FAME scheme, which will continue for three years. The amount, however, has been reduced.

Electric scooters are set to become costlier from June 1 as the government-provided subsidy on them will be reduced. The electric two-wheeler manufacturers get a subsidy under the government's Faster Adoption of Manufacturing of Electric Vehicles in India or FAME scheme, which is in its second phase. But as per a notification by the ministry of heavy industries, the subsidy under FAME II scheme has been reduced from Rs 15,000 per kWh to Rs 10,000 kWh. Further, the maximum subsidy under the scheme has been capped at 15 per cent of the ex-factory pricing, down from the current 40 per cent offered till now.

The decision was taken after a meeting of government representatives with 24 electric two-wheeler manufacturers earlier this month, according to news agency PTI.

According to the government, FAME II scheme is meant to provide incentives to buyers of electric vehicles to enable wider adoption, which may be encouraged as a purchase price. The scheme is exclusively for public and commercial transport in the segments of electric three-wheelers (e-3W), electric four-wheelers (e-4W), and electric buses.

Society of Manufacturers of Electric Vehicles (SMEV) reacted strongly to government decision. It said that sudden reduction of subsidy may lead to a major decline in EV adoption, impacting the entire industry for a considerable period of time.