Electric Two-Wheeler Prices Shock Potential Buyers

The Indian government has recently revised its FAME II subsidy scheme for two-wheelers, causing prices for electric two-wheelers to increase and shock prospective buyers. The subsidy element used to be as high as 40% of the ex-showroom price of the vehicle, but after an investigation into allegations of fake localisation claims and incorrect subsidy claims by 12 electric two-wheeler makers, the government found that many were importing components instead of adhering to component localisation norms. The government subsidised the cost of two-wheelers to encourage faster development of the local supply chain. Greaves Electric Mobility Private Ltd, a subsidiary of Greaves Cotton Ltd, allegedly failed to adhere to Phased Manufacturing Programme Guidelines and may be de-registered from the FAME India Scheme Phase II. This sudden price increase will impact retail sales and manufacturers’ business plans. However, Bharat New-Energy has announced it is not changing its prices and remains supportive of the government’s decision to reduce FAME subsidies, which it believes will strengthen the industry in the long run. This price increase may result in the consolidation of the industry, something the CEO of Bharat New-Energy predicted would happen in 2023.