Come April 1, 2024, potential buyers of electric scooters in India may need to brace themselves for a significant price hike, a potential increase of up to 10 percent. This surge, as forecasted by the Investment Information and Credit Rating Agency of India Limited (ICRA), could have notable implications for the affordability of electric two-wheelers (e-2Ws) across the country.
The impending price hike arrives at a crucial time for the electric scooter market, which has been experiencing robust growth in recent times. However, the surge in upfront costs stems from the new Electric Mobility Promotion Scheme 2024 (EMPS), which offers reduced subsidies for e-2Ws compared to the FAME-II scheme, which is set to expire on March 31, 2024.
Under the EMPS, the subsidy for electric two-wheelers has been revised downward from INR 10,000/kWh to INR 5,000/kWh. Additionally, the maximum benefit per vehicle has been capped at INR 10,000.
“Electric scooter buyers may face a notable increase in prices starting April 1, 2024, due to the revised subsidy structure under the Electric Mobility Promotion Scheme 2024,” said an ICRA spokesperson.
Despite this temporary setback, ICRA projects that e-2W penetration is poised to reach 6-8% of the overall industry by the fiscal year 2025. Furthermore, the Indian government’s EV policy landscape includes incentives aimed at fostering domestic manufacturing of electric vehicles. Notably, companies investing in EV manufacturing in India stand to benefit from these incentives, with expectations high for players like Tesla to finally arrive on our shores.
While the exact impact on individual scooter models remains to be seen, this potential price hike could affect the affordability of electric scooters, particularly for budget-conscious buyers. However, it also means that now is the perfect time to purchase an electric scooter and save big before the FAME-II scheme expires.
