NEW DELHI: The government’s decision to increase incentive on electric two-wheelers (e2W) by 50 per cent (under Fame II scheme) will be a game changer for the sector, say EV makers.
The industry believes that EV sales are likely to soar in coming years even as its current share in overall vehicle sales in India is just about one per cent.
“The increase in the cap of subsidies for EVs will be a game changer driving consumers towards electric scooters even as petrol prices continue to breach the Rs 100 mark,” said Naveen Munjal, MD Hero Electric.
Hero expects the market to touch 5-7 million units on road over the next 5 years. Tarun Mehta, CEO and Cofounder Ather Energy, said that their sales have grown despite the pandemic and with this additional subsidy, they expect e-2Ws to disrupt the market, and clock 6 million units by 2025.
“Ather Energy already has plans to expand distribution to 30 cities in the next six months and this increased subsidy will help accelerate consumer demand, immensely,” he added.
According to Society of Manufacturers of Electric Vehicles data, e2W sales fell six per cent in FY21 to 1,43,800 units. However, only 40,800 units were high-speed, the category which is eligible for incentives.
The amendment in the scheme came after it was criticized for not providing enough support to lift India’s EV industry. According to reports, only five per cent or around Rs 500 crore of the allocated Rs 10,000 crore fund has been utilised so far.
Sales wise, only 58,613 e2Ws were sold under the scheme as against the target of selling 10 lakh units by March 2022. By 2025, 2Ws are expected to achieve 8-10 per cent penetration in the overall market.