The Centre has announced a new scheme to promote sales of electric two and three wheelers in the country. According to Heavy Industries Minister Mahendra Nath Pandey, Rs 500 crore is being allocated for the Electric Mobility Promotion Scheme (EMPS), 2024. This scheme is valid for four months from April 1 onwards.
In February 2024, the government had raised the allocation under the second iteration of Faster Adoption & Manufacturing of Electric Vehicles in India (FAME-II) scheme to Rs 11,500 crore, up from Rs 10,000 crore. A statement from the Ministry of Heavy Industries had said these subsidies for demand incentive would be eligible for electric two, three, and four wheelers sold till March 31, 2024, or till the time funds were available, whichever was earlier.
In that instance, the subsidies for electric two, three, and four wheelers were revised to Rs 7,048 crore, of which Rs 5,311 crore was for electric two-wheelers. An allocation of Rs 4,048 crore was made for purchasing electric buses and setting up electric vehicle (EV) charging stations.
The FAME India scheme seeks to facilitate the uptake of EVs and chargers by subsidising them. The programme also aims to spur localisation of EV components while also driving sales up.
Initiated in 2019, FAME II has so far provided subsidy on sales of nearly 1.2 million two-wheelers, 141,000 three-wheelers, and 16,991 four-wheelers. More than Rs 5,829 crore has been disbursed under the FAME II scheme.
The demand for and affordability of electric two-wheelers in India have been on the upswing for some time. Price cuts and launch of affordable models by companies like Ola Electric, Ather Energy and Bajaj Auto-owned Chetak Technology have played a major role in narrowing the difference between costs of battery-powered and petrol-run two-wheelers in the country.
Sales have been on the rise and are being seen at about 850,000 units for FY2024. According to data from govt’s Vahan portal, electric two-wheeler makers saw sales at 81,608 units in January 2024, which is a 26% from a year ago, and 8% more month-on-month.
Electric two-wheelers, however, still only make up just 4.5% of the market.
Along with (still) higher prices, deficient charging infra is considered to be a major cause of slow uptake of these vehicle in the country.
Helpful policy moves like PLI, FAME, Make in India and Atmanirbhar Bharat have played a significant role in pushing sales up. It has led to more domestic manufacturing and making EVs cost efficient to meet specific Indian requirements. All these factors have combined to facilitate in deeper electric three-wheeler penetration in the country.
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