Prices of E2Ws or electric two wheelers set to increase from June 1

There has been a rise in the use of electric two-wheelers (E2W) in India. However, there will be a rise in the cost of electric vehicles from June 1. It is so because the government of India will be decreasing the incentive cap for electric two-wheelers. The incentive is offered under the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME 2) plan.

According to the notification issued by the ministry, the incentive cap for the two-wheelers will be 15 percent instead of 40 percent. Similarly, the demand incentive will be has been reduced from Rs 15,000 per kWh to Rs 10,000 per kWh.

For those who are unknown, the FAME India initiative was started on April 1, 2019, for 3-year term. Later it was extended for the next 2 years till March 31, 2024. The overall cost of FAME Phase II is Rs 10,000 crore.

It is believed that the government has taken the decision after it found that E2W manufacturers were allegedly claiming FAME-II subsidies by violating minimum localization requirements. Allegations popped out against companies like Ola Electric, Ather Energy, TVS Motor and Hero MotoCorp for keeping prices of vehicles lower by not including components like chargers and propriety software.

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