The Indian government’s new Electric Mobility Promotion Scheme 2024 will provide a temporary bridge to maintain electric vehicle (EV) adoption momentum after the FAME-II subsidy program concludes at the end of March. However, the new scheme offers lower subsidies compared to FAME-II.
Credit rating agency ICRA expects the initial cost of an electric two-wheeler (e-2W) to increase by 10 per cent due to the reduced subsidy. This would make e-2Ws 70 per cent more expensive than petrol scooters upfront. Despite this setback, ICRA predicts e-2W penetration to reach 6-8 per cent of the overall industry by FY2025, driven by factors like lower operating costs for electric vehicles and continued government support for the EV sector.
