The enhanced demand incentives for electric two-wheelers under the FAME-II scheme by the government will significantly reduce the upfront price gap with the internal combustion engine (ICE)-based counterparts and thus drive up demand, according to ratings agency ICRA NSE 1.60 %. In the latest modifications to the Faster Adoption and Manufacturing of Electric Vehicles in India scheme (FAME II), the government has increased demand incentive for electric two-wheelers (e2W) by 50 per cent to Rs 15,000 per kwh, from 10,000 per kwh earlier.
The maximum cap on incentive for e2Ws was also increased to 40 per cent of vehicle cost from 20 per cent earlier, as per the modifications.
