CEF Insights
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Electric Mobility
Govt to cut FAME II subsidy on electric 2-wheelers from June
Meghna Nair's Insight
Notable Because

A CEEW-CEF publication shows that e-2W are better placed to reach their FAME policy targets than other categories. The policy initially provided incentives worth INR 10,000/kWh to e-2W, subject to a cap of INR 20,000/vehicle. In 2021, this was increased to INR 15,000/kWh, up to 40 per cent of the e-2W cost. The recent amendment reduces the e-2W subsidy back to INR 10,000/kWh, which is up to 15 per cent of the vehicle’s cost today.

What to look out for in the months ahead

As FAME II nears completion, it has met only 56% of its e-2W target. Lowering unit subsidies is an attempt at subsidising a larger volume of the country’s most successful EV category. With an increase in the total allocation from INR 2,000 crore to INR 3,500 crore, it remains to be seen whether 4,00,000 e-2W can be subsidised by March 2024.