Indian Government’s New Scheme for Electric Two and Three-Wheelers

On March 13, 2024, the central government announced a new scheme to promote the sale of electric two and three-wheelers.

New Scheme For Electric Two and Three Wheelers 

On Wednesday, Heavy Industries Minister Mahendra Nath Pandey announced that ₹500 crore is being allocated for the Electric Mobility Promotion Scheme (EMPS), 2024. This scheme is valid for four months, starting from April 1, 2024 onwards.

Under the new scheme, the incentive for electric two-wheelers was cut from ₹22,500 to ₹10,000. For electric auto rickshaws, the incentive has been set at ₹25,000 and ₹50,000 for electric three-wheelers with a higher battery capacity.

In February 2024, the central government raised the allocation under the second iteration of the Faster Adoption & Manufacturing of Electric Vehicles in India (FAME-II) scheme to ₹11,500 crore, up from ₹10,000 crore. A Ministry of Heavy Industries statement said these subsidies for demand incentives would be eligible for electric two-, three-, and four-wheelers sold till March 31, 2024, or until funds were available, whichever was earlier.

The FAME India scheme aims to facilitate the consumption of EVs and chargers by subsidising them. The scheme also strives to encourage EV component localisation while increasing sales.

FAME II was started in 2019 and so far has offered subsidies on sales of nearly 1.2 million two-wheelers, 1,41,000 three-wheelers, and 16,991 four-wheelers. Over ₹5,829 crore has been disbursed under the scheme.

The demand for and affordability of electric two-wheelers in India has increased for some time. Several big brands have entered the market and are launching affordable models. Some prominent companies offering electric vehicles are Ola Electric, Piaggio, Bajaj and Mahindra. The affordability of electric vehicles is causing an increase in demand among individuals.

Sales of Electric Vehicles in India

According to the Government’s Vahan portal data, electric two-wheeler makers saw sales at 81,608 units in January 2024, an increase of 26% from the same period a year ago. Meanwhile, the electric three-wheeler sales have touched 5,70,000 units in FY2024.

Various policies like FAME, PLI, Atmanirbhar Bharat, and Make in India are playing an effective role in pushing sales up. They are leading to more domestic manufacturing and making EVs cost-efficient to meet specific Indian requirements.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.