Under the 'PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme' which will be rolled out soon, electric two-wheeler buyers can avail a maximum subsidy of up to Rs 10,000 in the first year and Rs 5,000 in the second year.
Union Heavy Industries Minister HD Kumaraswamy said on Thursday that the subsidy under the new scheme for electric two-wheelers has been fixed based on battery power at Rs 5,000 per kilowatt hour but the overall incentive will not exceed Rs 10,000 in the first year. He added that in the second year, it will be halved by Rs 2,500 per kilowatt hour, and the overall benefit will not exceed Rs 5,000.
The current and upcoming subsidies on two-wheelers are much lower than what it was under FAME 2 scheme.
In June 2023, the Ministry of Heavy Industries (MHI) had revised the FAME-II subsidy amount to Rs 10,000 per kWh as against the earlier amount of Rs 15,000 per kWh. The ministry noted that the cap on incentives for e-2Ws will be 15% of the ex-factory price of vehicles from 40% before June 2023.
In March this year, the subsidies under the Electric Mobility Promotion Scheme (EMPS) were further reduced to Rs 5,000/kWh subject to a cap of Rs 10,000 per two-wheeler.
Currently, popular electric scooters from makers like Ola, TVS, Ather Energy, Hero Vida (Hero Motocorp) and Chetak Bajaj have battery capacities ranging from 2.88 kWh to 4kWh in a price range of Rs 90,000 to Rs 1.5 lakh.
Kumaraswamy also informed that e-rickshaw buyers can avail of subsidy benefits of Rs 25,000 in the first year and Rs 12,500 in the second year of the PM E-DRIVE scheme. For the L5 category (cargo three-wheelers), they will get a benefit of Rs 50,000 in the first year, and for the second year, it is Rs 25,000.
When asked about reasons for leaving out electric passenger vehicles used for commercial purposes under the scheme, Kumaraswamy said they attract only 5% GST at present, unlike 28% plus cess for internal combustion engine vehicles.
To avoid the misuse of government subsidy in the scheme, MHI Secretary Kamran Rizvi said, "We learnt many things from FAME-II. So, every six months there will be a conformity test of production, which will ensure that twice a year everything is tested."
Commenting on the targeted level of EV penetration with the new scheme, Rizvi said the government is expecting 10% of new annual sales in electric two-wheelers and 15% of new annual sales in three-wheelers.
The Union Cabinet on Wednesday approved two major schemes with a total outlay of Rs 14,335 crore to promote the use of electric vehicles, including buses, ambulances and trucks.
