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Subsidies on Electric Scooters: State-wise subsidies for buying an electric scooter in India

Wondering what is the difference between a standard vehicle powered by petrol or diesel and an electric vehicle? In an eclectic vehicle, instead of an internal combustion engine running on fossil fuels, there is a motor, which is powered by electricity. The vehicle must be plugged into a wall outlet in order to charge an internal battery, which powers the electric motor.

The primary benefit of an electric vehicle is near zero emissions. Due to the absence of a tailpipe, pure electric vehicles emit no carbon dioxide when running. The result is a significant reduction in air pollution. The biggest deterrent is price. Thanks to the expensive lithium-ion batteries inside, EVs are more expensive than petrol or diesel-powered vehicles. This is where subsidies from the government step in. The cost gap between standard internal combustion vehicles and electric vehicles can be bridged with attractive government subsidies.

In this article, we have explained in detail the subsidies provided by the Government of India for electric vehicles, specifically electric scooters.

Also read: Best Electric cars in India: Find the latest prices, range, colours, images and specifications

Government subsidy for electric scooters in India

Planetary health is of utmost importance. Although saving the environment in a day is unlikely, we can certainly take small steps that will pay off in the long run.

It must be noted that it is impossible to have an electric vehicle (EV) with a zero carbon footprint since electricity also comes from fossil fuels. However, electric vehicles are more environmentally friendly compared to petrol or diesel vehicles. Therefore, to increase the use of electric vehicles, the government has increased its subsidy program for electric vehicles.

OLA S1 Pro

OLA S1 Pro electric scooter

Thanks to the pricey lithium-ion batteries inside, EVs are also expensive – another reason the government offers subsidies. Consumers can bridge the cost gap between standard internal combustion vehicles and electric vehicles by availing of the federal government’s subsidy for electric vehicles.

Subsidising EVs by the government is, therefore, crucial to making the journey of EV adoption easy in India. Charging infrastructure is also important and the government is aiming to set up at least 10,000 charging locations over a three-year period under phase 2 of the FAME scheme.

India’s state-wise subsidies for electric scooters

STATE SUBSIDY MAXIMUM SUBSIDY DISCOUNT ON ROAD TAX
Maharashtra Rs. 5,000 Rs. 25,000 100%
Meghalaya Rs. 10,000 Rs. 20,000 100%
Gujrat Rs. 10,000 Rs. 20,000 50%
Assam Rs. 10,000 Rs. 20,000 100%
Bihar Rs. 10,000 Rs. 20,000 100%
West Bengal Rs. 10,000 Rs. 20,000 100%
Rajasthan Rs. 2,500 Rs. 10,000 NA
Odisha NA Rs. 5,000 100%
Uttar Pradesh Nil Nil 100%
Kerala Nil Nil 50%
Karnataka Nil Nil 100%
Tamil Nadu Nil Nil 100%
Telangana Nil Nil 100%
Madhya Pradesh Nil Nil 99%
Andhra Pradesh Nil Nil 100%
Punjab Nil Nil 100%

FAME subsidy

FAME stands for Faster Adoption and Manufacturing of Hybrid and Electric Vehicles. In 2013, the National Mission on Electric Mobility 2011/National Electric Mobility Mission Plan 2020 unveiled an incentive program for electric vehicles.

In the first phase of the FAME I scheme, which started on April 1, 2015, a two-year period was sanctioned. In the following years, the EV subsidy scheme was periodically extended. FAME was last extended till March 31, 2019. A Demand Incentive Disbursement Mechanism underpins the FAME scheme. Additionally, for each category of EV (pure electric and hybrid), the subsidy amount has already been determined.

Also read: ​​Ampere Magnus EX electric scooter now available via Flipkart

Image source: TVS Motor Company

FAME 2 subsidy

The second phase of the EV subsidy scheme is called FAME II. Launched on April 1, 2019, the government introduced the incentive program with an outlay of Rs. 10,000 crores for three years, beginning in April 2019.

Some of the pointers of the program are:

  • The FAME II program is designed to support 7,000 e-buses, 5 lakh electric 3-wheelers, 55,000 electric cars, and 10 lakh electric 2-wheelers. The latest developments have resulted in the extension of the EV subsidy scheme until March 2024.
  • As part of the revised FAME II scheme, electrical two-wheelers will receive increased subsidies. At first, two-wheeler electric vehicles were eligible for an incentive of Rs. 10,000 per kWh. Currently, it stands at Rs. 15,000 per kWh, an increase of 50 percent. Besides that, the subsidy cap has increased from 20 per cent to 40 per cent of the vehicle’s cost.
  • EVs with four wheels will continue to receive the same subsidy – Rs. 10,000 per kWh. For an electric car, the maximum incentive amount is Rs. 1.5 lakhs.

Requirements for FAME II

The everyday consumer should keep some things in mind:

  • Even though electric vehicles are eligible for subsidies, the ex-factory cost is capped at Rs. 15 lakhs. This indicates that EV four-wheelers priced above Rs. 15 lakhs are not eligible for the subsidy.
  • Battery-powered two-wheelers must have a minimum range of 80 kilometers and a minimum top speed of 40 kilometres per hour to be eligible for FAME II. Also, only two-wheelers under Rs. 1.5 lakh are eligible for the subsidy.

How does the FAME subsidy work?

  • Only OEMs (Original Equipment Manufacturer) registered under the FAME scheme can provide the subsidy.
  • After deducting the subsidy amount, the dealer will quote the price of the eco-friendly vehicle.
  • The dealer will inform the OEM of the purchase details.
  • The OEM will submit the purchase details to the National Automotive Board (NAB), which monitors the subsidy program.
  • The incentive will be credited to the OEM after verification is complete. After which, the OEM will finally credit the dealer with the subsidy amount.

Also read: Ather 450X, 450 Plus Gen 3 with longer range, larger battery launched in India: price, specifications

FAQS

1) How is the electric scooter subsidy calculated?

Subsidies are based on the battery capacity of the vehicle. Currently, it stands at Rs. 15,000 per kWh and incentives are capped at Rs. 1.5 lakhs. Besides the FAME subsidy, you can also make use of state EV subsidies if your state provides direct incentives for EVs.

2) What is the amount of subsidy on purchasing an electric scooter?

In addition to the federal FAME subsidy, state governments offer different incentives for electric vehicles. Each state has its own EV policy.

3) Will the FAME subsidy be credited to my bank account while purchasing an EV?

No, the FAME subsidy will not get credited to your bank account.

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