According to the Investment Information and Credit Rating Agency (ICRA), the cost of electric scooters in India is expected to increase by up to 10% over two years starting April 1, 2024. This price hike will significantly increase the prices of electric two wheelers throughout the country.
The electric scooter market has been growing significantly in recent times. However, the new Electric Mobility Promotion Scheme 2024 (EMPS) is expected to be less subsidized than the FAME-II scheme, which could contribute to the price increase. The EMPS scheme will come into effect after the FAME-II subsidy scheme expires on March 31, 2024.
Under the new scheme, the subsidy for electric two wheelers has been reduced from Rs.10,000/kWh to Rs.5,000/kWh. The maximum subsidy per vehicle has also been fixed at Rs.10,000. This change may cause a temporary setback. ICRA estimates that electric two wheelers will account for 6% to 8% of the total two wheeler market by FY2025.
The Indian government’s EV policy aims to promote domestic production of electric vehicles, which is seen as a positive factor. Companies investing in EV manufacturing in India will benefit significantly from these initiatives. There is also high expectation that companies like Tesla are looking to start manufacturing in India.
ICRA predicts that the price hike may also affect scooter models, which could reduce the number of electric scooters available and this is a disadvantage for buyers on a tight budget. However, purchasing an electric scooter before the FAME-II scheme expires can help you save a lot of money.
