Following latest revisions in the FAME-II Scheme, TVS Motor Company has announced the revised pricing for iQube Electric scooter. Prices for the scooter have been slashed by Rs 11,250 falling in line with the recent subsidised announced by the government. Similarly, electric scooter major Ather Energy announced that its scooters will now become more after a cost cut of Rs 14,500 after FAME II subsidy revision. It said, “We’ll announce on-road prices and any other necessary information over the next few days. Website will be updated later to reflect all this information."
Considering feedback from the industry, the Government has been considering remodeling of the FAME-2 scheme to improve acceptance. FAME II scheme was announced in Mar’19 with allocation of Rs 100 billion, but has not achieved desired results due to its stringent criteria and multiple challenges for OEMs to meet them. For instance, vehicle incentives distributed so far stands at only Rs 2.2 billion.
Electric two-wheeler firm Okinawa Autotech on Wednesday said it has reduced prices of its entire product portfolio, ranging between Rs 7,209 and Rs 17,892, in the wake of recent changes in the FAME II policy. The company’s Praise+ electric scooter is now priced at Rs 99,708 against Rs 1,17,600 earlier. Similarly, Praise Pro is now tagged at Rs 76,848, a drop of Rs 7,947 from Rs 84,795 earlier.
The Ministry of Heavy Industries has now announced partial amendments to FAME II (Faster Adoption and Manufacturing of Electric Vehicles in India) scheme to support EV adoption in 2Ws, 3Ws and Buses (amendment notification). Lauding the latest revision in the FAME-II norms by the Centre, stakeholders in the sector have said that the move will substantially increase the demand for electric bikes and scooters. We decode what all changes have been made to the FAME-II policy:
E-2Ws: Increase in demand incentive to Rs 15,000/KWH from Rs 10,000/KWH, with maximum cap at 40% of the cost of vehicles.
E-3Ws: State-owned Energy Efficiency Services (EESL) will come out with an aggregate demand for 300,000 units for multiple user segments. This bulk tendering should lead to economies of scale for OEMs and consequent reduction in the prices of products. The details will be worked out by EESL for implementation.
E-Buses: Cities with over 4mn population (Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat and Pune) will be targeted. The details shall be worked out by EESL for demand aggregation and implementation.
Reducing total cost of ownership (TCO) gap for 2Ws: TCO indicates acquisition and running costs till vehicle is disposed, calculated on a per km basis. As per our calculations, TCO for an ICE scooter (Honda Activa) stands at Rs 5.7/km, while it is higher for E-2W (Ather 450 Plus) at Rs 7.2/km, assuming a monthly usage of 500kms. Including the Rs 5,000/KWH additional incentive, the TCO reduces to Rs 6.5/km. In case of monthly usage of 700kms, TCO will now be similar, which should attract customers with higher usage, especially from the commercial segment.