- Subsidy benefit currently limited to two-wheeler segment

- Indian government increases demand incentive by 50 per cent for electric two-wheelers to Rs 15,000 per kWh from the earlier uniform subsidy of Rs 10,000 per kWh

- Incentive changes in the passenger vehicle segment, if any, might be known at a later date

In an effort to encourage electric mobility in the country, the Indian government has partially modified the FAME-II (Faster Adoption and Manufacturing of Electric vehicles – second phase) scheme to increase the subsidy for electric two-wheelers. The government has increased demand incentive by 50 per cent for electric two-wheelers to Rs 15,000 per KWh from the earlier uniform subsidy of Rs 10,000 per KWh for all electric vehicles (EVs) and hybrids, except buses.

Moreover, the Department of Heavy Industries has now capped the incentives for electric two-wheelers at 40 per cent of the cost of vehicles from the older cap of 20 per cent. Currently, the revisions in subsidy is limited to electric two-wheelers and it is to be seen if the benefits will be extended to electric passenger vehicles as well. Any further modifications to the policy might be known in the days to come. Considering that the government plans to boost up EV sales in the country, a similar initiative in the passenger vehicle segment would be a welcome move.

To learn more about the policy roadmap for electric vehicles in India, click here.