E-scooter sops to rise 75% to Rs3.5k cr
NEW DELHI — Although a new subsidy scheme for electric two-wheelers and public transport is not in the works, the government plans to increase the subsidy for electric two-wheelers under FAME II by 75% to Rs 3,500 crore by reallocating some of the funds available for three-wheelers, where demand has been far lower than the budgeted level.
In contrast, there is strong demand for electric buses and two-wheelers under the Rs 10,000-crore scheme, which has a five-year term that ends in March of next year.
While consultations with the seven registered entities will begin on Thursday in order to increase the allocation for electric buses beyond the current level of Rs 3,545 crore, discussions with electric two-wheeler original equipment manufacturers have already concluded because the Rs 2,000-crore allocation has been depleted.
According to a senior government official, the industry has agreed to a proposal in which the demand incentive will likely be retained at Rs 10,000 per kWh of battery capacity, with a 15% cap on ex-factory price. The current ex-factory price ceiling is set at 40%.
“The options were to either terminate the subsidy completely or agree to extend it but with a lower payout. The industry wants subsidies for a longer period of time, even if they are lower “According to the official.
The government hopes to extend FAME II for electric two-wheelers until around February and subsidize 10 lakh e-scooters with an increased allocation and lower subsidy on each scooter, with the price cap remaining at Rs 1.5 lakh. Over 5.6 lakh electric two-wheelers have received subsidies so far.
“As the demand for e-two-wheelers continues to grow, the government is committed to providing the necessary support to the industry to ensure sustainable growth and reduce carbon emissions… The consensus reached during the stakeholder consultation signals a positive step towards sustainable transportation solutions in India,” heavy industries minister Mahendra Nath Pandey said.
The proposals are expected to be considered by the Programme Implementation and Sanction Committee, which is made up of secretaries from various ministries and whose approval is required for reappropriating funds.
According to an official, the allocation for electric three-wheelers is expected to be reduced from Rs 2,500 crore to Rs 700 crore due to low demand for e-rickshaws.
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Content Credit: THE TIMES OF INDIA