The Heavy Industries ministry is considering lowering the subsidy on each electric two-wheeler. The overall amount earmarked under FAME-II for electric two-wheelers – presently at Rs 2,000 crore – will be increased, but the amount allocated per scooter could be reduced significantly.

Currently, there is no proposal to extend the FAME-II scheme further than March 2024 or bring in FAME-III, an official told PTI, on condition of anonymity.

A shareholder meeting with 24 electric two-wheeler manufacturers who come under the purvey of the FAME-II subsidy, was convened on Tuesday, May 16. They agreed that 'the demand incentive be kept at Rs 10,000 per kWh battery capacity, with a cap on 15 percent of ex-factory price, the official told PTI. This is against the current Rs 15,000 per kWh battery capacity with a cap of 40 percent of the ex-factory price.

The official further said that a proposal to this effect will be put before the Programme Implementation and Steering Committee.

The Union Minister of Heavy Industries, Mahendra Nath Pandey stated that the government was collaborating closely with industry stakeholders to work on incentives to bolster the adaption of EVs in the country, PTI stated.

He expressed that most two-wheeler manufacturers want a continuation of the subsidy period, even if it was reduced. Hence, there was a consensus to cut down the subsidy to 15 percent for 2-wheelers, which would help extend the scheme till February-March 2024.