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FAME II Subsidy Cut; EV Players Set To Hike Price The committee, set up by the ministry, had recommended certain changes to improve the viability of the development of public charging infrastructure for electric vehicles

By Teena Jose

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Industry players like Ola Electric, Ather Energy, Okaya EV, Oiknawa and Matter Energy among others are set to hike the price by about 15-20%, with the reduction in subsidies on electric two-wheelers under the FAME II scheme, beginning 1st June.

The Ministry of Heavy Industries on Friday announced reduction in FAME II subsidy for electric two-wheelers to INR 10,000 per kWh from INR 15,000 along with cutting the cap on the maximum subsidy on vehicle's ex-factory price to 15% from 40%. The committee, set up by the ministry, had also recommended certain changes to improve the viability of the development of public charging infrastructure for electric vehicles.

According to a moneycontrol report, majority of the key stakeholders affirmed that this is a 'step in the right direction' and will enable the 'manufacturing ecosystem to flourish'. However, a handful of them like Hero Electric have urged the government to take a relook at the recent decision as it may significantly dent the volumes of E2Ws.

As per the official website of Ola Electric, it is stated that the price of the S1 Electric scooter will be INR 1.30 lakh which used to cost INR 1.15 lakh till last month. Similarly, the firm hiked price for all scooters by IR 15,000 starting range. EV manufacturers Ather Energy and Matter also chose the same line and increased the price for its scooters.

On the other hand, Hero Electric reportedly said that it will not increase the price of its scooters as it decided to remain dedicated to promoting the adoption of electric two-wheelers and dispelling misconceptions about their cost of ownership.

"The company firmly believes that affordability plays a pivotal role in accelerating the widespread adoption of electric vehicles, and maintaining price stability is a crucial step toward achieving this goal. While the industry may still clock higher sales than last year, it may not be able to keep up the tempo of the exponential growth and may even fall short of the target of 2.3 million units, as projected by Niti Aayog," Sohinder Gill, CEO of Hero Electric, said in a statement.

Arun Sreyas, Co-Founder, RACEnergy, has opined that, "Amidst the amended FAME II scheme and the reduced subsidies, we at RACEnergy remain steadfast in our commitment to revolutionising the electric mobility sector. While the reduced subsidies may impact the affordability of EVs, we see it as a catalyst to innovate further and find new ways to make electric transportation accessible to all. We believe that sustainable mobility is the way forward, and we will continue to strive towards creating cutting-edge battery swapping solutions that empower individuals to embrace a greener future, despite the subsidy changes."

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.
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