KEY HIGHLIGHTS
- FAME subsidy Phase 3 not in sight
- A potential discontinuation expected
- Rising adoption of EVs one of the driving force
Electric 2-Wheelers To Get Expensive As FAME Subsidy Likely To Cease
As the Indian government considers discontinuing subsidies for electric two-wheelers in the upcoming weeks, the future of the electric vehicle market remains uncertain. The deliberation on not implementing the third phase of the FAME subsidy, the Faster Adoption and Manufacturing of Electric Vehicles (FAME III) scheme, has led to discussions within various government departments. Also, join our Whatsapp Group Community of petrolheads to find out more exciting stuff about the Auto world.
Is it going to be put to rest and what does this development mean for you, the upcoming buyers? Read on as we explain it all.
FAME Subsidy Phase III- Chances Looks Bleak
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Earlier this year, the finance ministry opposed the continued subsidy plan, resulting in a temporary dip in demand for electric two-wheelers. However, recent trends indicate a stabilization in demand, leading government officials to argue that the transition to cleaner-fuel vehicles will happen organically, driven by the economic advantages despite the higher initial costs.
As FAME II, supporting two-wheelers, three-wheelers, and four-wheelers used for public transport, approaches its conclusion, the government plans to offer subsidies to approximately 10 lakh two-wheelers. This commitment comes amid the reallocation of funds due to increased demand from local players, even though the heavy industries ministry's more ambitious FAME III plan did not garner the popular vote.
Concurrently, the government is exploring alternative measures to boost electric vehicle adoption, including a potential initiative to encourage high-end electric car manufacturers, such as Tesla, to establish production facilities in India. This initiative, currently under deliberation, may involve a production-linked incentive mechanism or a phased manufacturing plan.
However, concerns over irregularities in FAME II, combined with the government's reluctance to extend support, have influenced the decision to refrain from introducing FAME III. Despite this uncertainty, there has been a surge in demand for electric two-wheelers in the country. Manufacturers remain hopeful that a renewed push, potentially through ongoing subsidies or an alternative incentive program, could enhance the presence of electric two-wheelers nationwide.
While all this is an ongoing process, with regular discussions and more, the picture will be clear once Phase 2 is over. After that, you will have a more concrete idea of what might be coming your way.
Verdict
In conclusion, the future trajectory of the electric vehicle market in India, particularly concerning two-wheelers, remains dynamic and dependent on the government's strategic decisions. While the potential end of subsidies under the FAME II scheme introduces an element of uncertainty, the recent surge in demand indicates a growing acceptance of electric two-wheelers. The government's exploration of alternative incentives and schemes, such as potential support for high-end electric car manufacturers like Tesla, opens avenues for a diversified approach to promote cleaner mobility. Manufacturers are keenly watching for indications of continued support or alternative programs, coupled with ongoing investments in charging infrastructure, to shape the landscape for electric two-wheelers on a broader scale across the country.
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