The Ministry of Heavy Industries recently announced that the INR 15,000/ kWh FAME II subsidy on e-2Ws, was to be revised downwards to INR 10,000/ kWh from 1st June. The policy previously subsidised up to 40% of the cost of an EV, which in some cases helped reverse its inherent price disadvantage. The reduction in subsidy amount is expected to hike up e-2W prices, thus impacting their demand.
The reduction in subsidy amount has already negatively impacted the demand for e-2Ws. May witnessed an e-2W sales peak of 1,05,283 units. However, less than a quarter of that has been sold as of 22 June. E-2W sales, and by extension EV sales as a whole may see a sudden dip over the next few months. However, as more states release their EV policies, we may see the segment recover in time.