• Report
  • CRISIL Research Impact Note
  • Road Transport
  • CRISIL Research
  • manufacturers
April 08, 2019

Unplugged!

Subsidy ends for ~95% of electric scooters

Manufacturers may need to scramble to conform with stringent FAME-II, unless the government helps out by diluting the norms

Sudden loss of charge

 

The Ministry of Heavy Industry and Public Enterprise, through a notification on March 28, 2019, laid out the eligibility criteria for electric buses, passenger vehicles, 3- and 2-wheelers to avail of the ‘Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India’, or FAME-II, incentives.

 

The criteria is based on minimum top speed, minimum range per charge, minimum acceleration and energy consumption efficiency of electric vehicles (EVs). It has also mandated that all EVs except e-rickshaws and e-carts should have regenerative braking capability to be eligible for incentive.

 

Interestingly, ~90% of the vehicles that availed of incentives under the previous FAME I scheme, which was operational between April 1, 2015, and March 31, 2019, were electric scooters.

 

Our assessment of the product portfolio of various EV manufacturers indicates that the electric 2-wheeler segment would be impacted the most by FAME-II rules. We believe more than 95% of the electric 2-wheeler models being produced now won’t be eligible for incentive under FAME-II.