Electric two-wheeler firms welcome hike in subsidy, say it will accelerate EV adoption

Hero Electric MD Naveen Munjal said that it will be a game-changer, driving consumers towards electric scooters even as petrol prices continue to touch the Rs 100 mark.
Electric two wheeler
Electric two wheeler
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Electric two-wheeler companies have welcomed the latest revision in the FAME-II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) norms by the Union government, saying that the move will substantially increase the demand for electric bikes and scooters. This comes after the Department of Heavy Industries on Friday, June 11, raised the subsidy per electric two-wheeler, which is dependent on the battery size, to Rs 15,000 per kilowatt-hour from Rs 10,000. The cap on subsidy has also been hiked to 40% of the price of the vehicle from 20%. 

Commenting on the development, Hero Electric MD Naveen Munjal said: "In what will be seen as one of the most significant moves in the last decade for the electric vehicles industry, the increase in subsidy under FAME II will usher in a new era of electric mobility in India.” He was of the view that the increase in the cap of subsidies for EVs will be a game-changer driving consumers towards electric scooters even as petrol prices continue to touch the Rs 100 mark.

“We welcome the government’s continued support of EVs. Sustainable mobility solutions are very important for the future and TVS is investing significantly behind this. The improved incentives for electric two-wheelers will increase penetration. Such policy direction should lead to the indigenous development of future technology,” said Sudarshan Venu, Joint Managing Director, TVS Motor Company. 

In a statement, electric two-wheeler maker RattanIndia-Revolt Intellicorp (Revolt) said that the company, along with its customers, are set to be big gainers of the major revisions made by the government to the FAME II scheme which has increased the incentive for manufacturers from Rs 10,000 per kWh to Rs 15,000 per kWh. "This would translate into Rs 48,000 incentive per bike that Revolt sells. This could mean FAME II incentives up to Rs 480 crore for a current production capacity of 1 lakh bikes per annum," it said. 

"This bold policy measure clearly demonstrates the intent of the government to rapidly transform the adoption of electric vehicles," Revolt and RattanIndia Enterprises Chairman Rajiv Rattan said. Revolt CEO and MD Rahul Sharma said that the decision will further incentivise both the EV manufacturers and customers and will exponentially accelerate EV adoption in the country.

Tarun Mehta, CEO and Co-founder Ather Energy said that the revision in the FAME policy, increasing the subsidy by 50% per KWh is a phenomenal move. “Sales of electric two-wheelers have grown despite the pandemic and with this additional subsidy, we expect electric two-wheeler sales to disrupt the market, and clock 6 million+ units by 2025. Ather Energy already has plans to expand distribution to 30 cities in the next 6 months and this increased subsidy will help accelerate consumer demand, immensely. The Government's continued support to drive adoption of EVs, with a keen focus on locally built electric two-wheelers will make India the manufacturing hub of EVs.”

Welcoming the government’s amendment to the FAME II subsidy, Bhavish Aggarwal, Chairman and Group CEO, Ola said that the incentive of Rs 15,000 per KWH will help make electric two-wheelers affordable for many more consumers. “I believe India has the potential to lead the world in sustainable mobility and become a big market as well as a global EV manufacturing hub. Our Ola FutureFactory will be coming online soon and we will be aggressively pricing our range of electric scooters. With yesterday’s policy incentives, we will be able to accelerate the global transition to sustainable mobility even faster.”

Nexzu mobility Chief Marketing Officer, Pankaj Tiwari, said: "Government's move to increase subsidy to electric bikes and scooters by 50%, subject to those that meet the FAME II criteria, is a welcome stimulus which will boost adoption and encourage research & development and innovation for enhanced customer experience."

With IANS inputs

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