The Government of India has decided to lower the subsidy payable to electric two-wheelers under the FAME (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme, and electric vehicles (EVs) will become more expensive starting June 1.

The Ministry of Heavy Industries has announced that the subsidy for electric two-wheelers registered on or after June 1, 2023, will be decreased to Rs 10,000 per kWh from Rs 15,000. The incentive cap for electric two-wheelers will be decreased from 40% to 15% of the vehicle’s ex-factory price. 

The FAME India initiative began on April 1, 2019, for a three-year period that was extended by two years till March 31, 2024. 

In Phase II of the FAME Scheme, the total outlay is ₹10,000 crore exclusively for public and commercial transport in the segments of electric three-wheelers, electric four-wheelers, and electric buses and privately owned registered electric two-wheelers.

The entire budget allocation for electric two-wheelers under FAME India phase II would be increased to Rs 3,500 crore using the Rs 1,000 crore allocation for electric three-wheelers.

The ministry-appointed committee also suggested adjustments to boost the profitability of the construction of public charging infrastructure for electric vehicles, including funding for upstream infrastructure. The infrastructure is scheduled to be completed by March 2024. 

Phase II of the FAME Scheme funded 8,82,967 EVs till February 15, 2022, totalling approximately Rs 3,311 crore in incentives. In addition, under the Scheme, the Centre has sanctioned 6,315 e-buses to 65 government organisations for intracity and intercity operations throughout 26 states/UTs.