Electric Two-Wheeler Prices Hiked As New FAME II's Curtailed Subsidy Norms Take Effect

The Heavy Industries Ministry recently notified new guidelines for electric two-wheelers, reducing the demand incentive and capping incentives based on the ex-factory price.

In response to the curtailed subsidy structure taking effect from June 1, leading electric two-wheeler manufacturers TVS Motor Company, Ather Energy, and Ola Electric have announced price hikes for their products, reported PTI. The Heavy Industries Ministry recently notified new guidelines for electric two-wheelers, reducing the demand incentive and capping incentives based on the ex-factory price.

In a statement, TVS Motor Company said that in order to propel the electrification journey further in a sustainable manner after the FAME II scheme revision, it has increased iQube's price between Rs 17,000 and Rs 22,000 depending on the variant. The iQube base and S trims were earlier priced at Rs 1,06,384 and Rs 1,16,886, respectively in Delhi, according to the report. 

"FAME II will gradually reduce over the next few quarters. The company will continue to deliver delightful product options and great value proposition to propel the electrification and green energy penetration in two-wheelers in the country," TVS Motor Company Director and CEO K N Radhakrishnan said, adding that the company will offer a loyalty benefits programme for the customers of iQube, who have made bookings till May 20, 2023, for a limited period to ease the cost burden post the revision in FAME II subsidy.

Ather Energy also said that following the FAME II subsidy revision applicable from today, it has also revised the prices of its scooters with 450X now starting at Rs 1,45,000 (ex-showroom Bengaluru), the news agency reported.  The 450X with Pro Pack now starts at Rs 1,65,435 in Bengaluru, an increase of around Rs 8,000.

"The FAME II revision has resulted in a subsidy reduction of around Rs 32,000. However, the company is absorbing a huge chunk of this price impact for its customers with a view to quicken EV adoption in the country," Ather Energy Chief Business Officer Ravneet S Phokela said.

As per the report, Ola informed its electric scooter S1 Pro is now priced at Rs 1,39,999; S1 (3KWh) at Rs 1,29,999; and S1 Air (3KWh) at Rs 1,09,999. The product range is now roughly Rs 15,000 costlier than before.

"With an unyielding dedication to customer satisfaction, we have marginally increased our product prices starting June, despite significant reduction in government subsidies, making Ola S1 the best EV proposition in India," Ola Electric Founder and CEO Bhavish Aggarwal said.

In a statement, Hero Electric said that it will not increase the prices of its popular e-scooter models. Adding that it remains dedicated to promoting the adoption of electric two-wheelers and dispelling misconceptions about their cost of ownership.

"Despite the extreme financial crunch forced upon us due to subsidies stuck with Ministry of Heavy Industries for over 15 months, we will continue to do our bit in offering affordable mobility solutions to the discerning customers by holding on to our current prices till we can," said Hero Electric CEO Sohinder Gill.

In May, the government reduced the subsidy provided under FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme applicable to electric two-wheelers registered on or after June 1, 2023. The Heavy Industries Ministry notified the changes. For electric two-wheelers, the demand incentive will be Rs 10,000 per kWh. The cap on incentives for electric two-wheelers will be 15 per cent of the ex-factory price of vehicles from 40 per cent at present.

The Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) India scheme commenced on April 1, 2019, for a period of three years, which was further extended for two years till March 31, 2024. 

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