The sale of electric two-wheelers has hit a speed bump after the subsidy under Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme was slashed from 40% to 15% with effect from June 1.
The sales dropped by over 56% to 45,954 units in June as compared to 1,05,459 units in May. The data was shared by Minister of State for Heavy Industries Krishan Pal Gurjar recently in the Lok Sabha in a written reply to a question regarding subsidy on electric vehicles.
According to analysts, though higher sales may have been recorded in May in anticipation of price hike from June under the revised scheme, June marked the lowest sales in the current calendar year.
From June 1, 2023, the government reduced the subsidy incentive cap from 40% of the vehicle’s value to 15% and capped the subsidy at Rs 10,000 per kWh of battery.
According to the minister, the subsidy has been reduced keeping in mind the increasing penetration of the EV market. He said the decision was taken after stakeholders’ consultation with original equipment manufacturers (OEMs) of electric two wheelers and the approval of the Project Implementation and Sanctioning Committee for FAME-II scheme.
According to data compiled by the Society of Manufacturers of Electric Vehicles (SMEV) as per VAHAN Portal, 7,28,090 units of electric two-wheelers were sold across the country in fiscal year 2022-23. In 2021-22, the industry sold 2,49,621 units.
