EV subsidies explained: What are they and how to avail
Electric two-wheelers are slowly gaining prominence in India because they are environmentally friendly and have lower running costs. However, the most important factor behind ushering in the age of electric mobility in the country involves subsidies offered by both the Centre as well as various state governments. So, what exactly are these subsidies, and how do buyers avail them? Let us find out.
Why does this story matter?
The Indian EV segment is at a nascent stage. However, it is growing steadily and has the potential to reach a market valuation of $206 billion by 2030. In our country, the EV sector faces many hurdles such as a lack of charging infrastructure and high ownership costs. As such, it becomes imperative to offer subsidies so that demand does not wane.
The FAME II scheme will be valid till March 2024
The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) subsidy was introduced by the Centre in 2019. It is valid pan-India till March 21, 2024. Electric two-wheelers should meet certain criteria to be eligible for FAME II. They include a certain degree of government-specified localization, a minimum top-speed of 40km/h, and delivering at least 80km of range per charge.
An incentive of Rs. 15,000 is offered under FAME II
If the criteria is met, EVs can get an incentive of Rs. 15,000 per kWh of the battery. For example, the Ather 450X and Ola S1 Pro can avail of a subsidy of Rs. 43,500 and Rs. 59,550, respectively. Notably, the incentive amount should be 40% or less of the vehicle's total cost. Also, the two-wheeler's asking price should mention the FAME II benefit.
The incentives offered by the states are variable
Several state governments are also offering subsidies on EVs to encourage their adoption. However, the incentive amount is variable as some states take battery capacity into consideration, while others offer a fixed amount. Customers have to pay the two-wheeler's full amount and submit their Aadhaar details. The subsidy amount is later transferred to the buyer's bank account linked with the Aadhaar card number.
Here's a look at the benefits offered by some states
The Maharashtra government offers a fixed incentive of Rs. 10,000 on purchasing an electric two-wheeler. Also, vehicles get an additional benefit of Rs. 12,000 if they provide a five-year battery warranty. In Gujarat, a benefit of Rs. 10,000 per kWh of the battery is provided. However, it should not exceed 20% of the total value of the e-scooter or e-bike.
