The second phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme was launched in April 2019 by the Indian government to promote the adoption of electric vehicles (EVs) in the country. Under the scheme, incentives are provided to buyers of EVs, including two-wheelers, to help reduce the cost of ownership and make them more affordable.
However, in recent months, issues with the FAME-II subsidy have led to a drop in demand for two-wheeler EVs in the Indian market. According to reports, registrations of two-wheeler EVs dropped 23% month-on-month in April 2021, with some experts attributing the decline to issues with the subsidy program.
One of the main issues facing buyers of two-wheeler EVs is the limited availability of eligible models that are eligible for the FAME-II subsidy. As per the scheme, only EVs with a minimum range of 80 km per charge and a top speed of at least 40 km/hour are eligible for the subsidy. This has limited the number of models available to buyers, leading to a slowdown in demand.
In addition, some buyers have reported difficulties in claiming the subsidy, with reports of delays and complications in the process. This has further impacted demand for two-wheeler EVs, as buyers are hesitant to make a purchase if they are unsure whether they will be able to claim the subsidy. Despite these issues, there is still optimism among industry experts about the future of the two-wheeler EV market in India. The Indian government has recently announced plans to introduce new incentives and initiatives aimed at promoting the adoption of EVs in the country, including a proposal to waive registration fees for EVs.
Overall, while the current challenges facing the two-wheeler EV market in India are significant, there is hope that with the right policies and support, the sector can continue to grow and thrive in the years to come.