Ola Electric’s CFO stated that the FAME scheme has been a growth enabler for the Indian electric car industry. The reduction of the subsidies under this programme will have no effect on the country’s EV industry’s growth pace. According to him, the FAME initiative has already served its purpose. As a result, it makes no difference whether the subsidy is provided under the system or not, how much subsidy is provided, and so on.
Ather Energy, a prominent player in the Indian electric two-wheeler sector, has already announced that the price of its 450X electric scooter will rise on June 1 after the new FAME scheme.
Despite exposing the price increase, Tarun Mehta, co-founder and CEO of Ather Energy, has stated that the EV business must be self-sufficient very soon. He made it obvious that a corporate ecosystem reliant on subsidies would not last long.
Okinawa, another significant player in the country’s electric scooter sector, has stated that the price of electric two-wheelers will rise due to a fall in subsidy value. According to the EV company, there will be a short-term impact on sales, but in the long run, it will help the industry become self-sufficient.
The Society of Manufacturers of Electric Vehicles (SMEV) believes the ruling will further stymie EV adoption in the country. According to Sohinder Gill, Director General of SMEV, this sudden subsidy decrease could result in a significant drop in EV sales, affecting the entire industry for an extended period of time. He also stated that the EV two-wheeler category is still highly price sensitive, and that the growing price disparity between ICE and EV vehicles will eventually impact sales.
Indian shoppers are notorious for being price sensitive. Electric two-wheelers, particularly high-speed versions covered by the FAME 2 plan, are more expensive than their ICE counterparts. However, the FAME 2 subsidy, as well as subsidies provided by several state government EV policies, assisted in lessening the high price impact on customers, which undoubtedly aided the expansion of electric two-wheelers in India.
While low-speed scooters continue to dominate the Indian electric two-wheeler market, high-speed ones are progressively gaining ground. According to SMEV, this has enabled electric two-wheeler sales in India more than double to 846,976 units in the last fiscal year. Now that the FAME 2 subsidy has been significantly reduced, it will be interesting to observe how the industry and consumers react.
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