EV makers battle subsidy loss; innovate to rationalise product cost

The reduced subsidy on electric vehicle (EV) batteries under the government’s Faster Adoption and Manufacturing of Electric Vehicles (FAME-2) scheme has trapped the makers of EVs in a Catch 22 situation. On one side it makes business sense to shrink the size of batteries to cut their cost, on the other hand, they are operating in a nascent market, ill-equipped with charging infrastructure or swapping facilities. This has sent most original equipment manufacturers (OEMs) into a tizzy trying to address the issue.

In June this year, the Ministry of Heavy Industries cut the subsidy it offered on EV batteries from Rs15,000 per kilowatt hour (KwH) capacity to Rs 10,000/KwH and capped this at 15% of the ex-factory value of the vehicle –