Hello and welcome to Simplified on PowerDrift where we take complicated automotive ideas and
break them down into simple digestible pieces.
And today we are talking about the new update on the electric vehicle front, the FAME II
subsidy changes. I would invite you to hit subscribe now, because India's best automotive
content is here and do hit the bell notification icon so that this content can come to you directly.
So the FAME, the word stands for, faster adoption and manufacturing of electric vehicles.
It's a scheme that started in 2015, phase one ended in 2019
and now the phase two is on, it's supposed to be ending in 2022,
but things are not looking good for the FAME II scheme because it's not taken off as much as it should have.
Now, there is no doubt that the FAME II subsidies have increased the numbers of sales.
And in fact, I think one and a half lakh electric two-wheelers were sold in the country last year,
but unfortunately, between COVID-19 and all of these things, less two-wheelers were sold
in 2021, 5% less. 10,000 crores were set aside and less than 500 crores have been availed
in subsidies by people so far, so obviously, the government is a little bit worried.
Even more worryingly, while the FAME II subsidy does cover electric two-wheelers,
electric three-wheelers, buses and other categories of vehicles,
the total adoption has so far been only 5% of the net target for the entire phase.
And obviously the manufacturers are quite happy because the recent changes mean that the amount
of subsidy available has actually gone up quite a bit.
So before the changes, you would get rupees 10,000 back as subsidy per kilowatt-hour.
Kilowatt-hour being a unit of measuring the energy of your EV.
So if you bought a three kilowatt-hour EV, you'd get about 30,000 rupees back.
That has gone up to 15,000 rupees, which is actually a substantial change if you think about it,
because that 30,000 just became 45,000 rupees off.
And the government didn't stop there, they also changed the rule where, in the previous
regime, you could get 20% of the cost of the vehicle off as maximum subsidy,
but now it's up to 40%, which is a huge big deal.
Now, it's not easy to qualify for the FAME II subsidy because there are stringent criteria
and they're meant to promote the right kind of two-wheeler as well as to ensure that fly-by-night
operators don't take advantage of the subsidy and disappear leaving customers high and dry.
So the qualification criteria for the two-wheelers is actually quite stringent,
we're going to put all of them up here on the board, but for example,
two-wheeler qualifying for the FAME II subsidy must have a minimum range
of 80 kilometres and it must be able to do at least 40 kilometres an hour
and there are other conditions as well.
And that means that the number of two-wheelers that are on sale in India, electric, and the
number of electric two-wheelers that qualify for the subsidy are actually not in the same list,
so if you go to the website of the Department of Heavy Industries, which administers the
subsidy in India, you'd discover that there is a list of manufacturers on which you'll
find familiar names like TVS and Ather, as well as a list of qualifying vehicles where
they tell you that the TVS iQube is TVS's only subsidy ready product, Ather makes three scooters,
which are subsidy ready, and so on and so forth.
Obviously, the biggest element in these lists is Hero Electric, which is India's largest company
that sells electric two-wheelers, and they have the largest list of options,
which qualify for the FAME II subsidy.
What this means to you as the user is that with the recent updates, the prices of electric
two-wheelers have fallen again.
So if you were to buy an Ather 450X, you'd get 15,000 rupees off on that price,
if you were to buy the TVS iQube, it will be almost 11,000 rupees less than it used to be before.
So if you were in the market for an electric two-wheeler, now would be a good time to get it.
And fortunately for you getting the subsidy is actually a no brainer in terms of the process.
Because TVS, Ather and the other companies are doing all the legwork for you.
So all you have to do once you purchase the two-wheeler, is go to the Department of Heavy
Industries website, generate an OTP with your Aadhaar card
that confirms the fact that you in fact, bought a electric vehicle
and the rest of the process, the subsidy amount, etc. is all handled by the manufacturer.
You will actually only pay the subsidized amount to the dealership in any case
so it's not like you're paying, say 15,000 rupees more for the Ather and
then getting a 15,000 rupee subsidy back at some point.
The only exception to this is where states are offering local subsidies, especially people
like Delhi, where you do have a reimbursement process for the
additional component of the state subsidy.
But the basic FAME II subsidy's already accounted for in the price and
you don't actually have to do anything.
So, does this make the idea of buying an electric two-wheeler more attractive to you?
I would like to hear from you.
Please do leave us a comment.
Because, is price the only reason why you're thinking about electric vehicle?
If that be the case, FAME II will definitely help
but if that's not the real challenge that you're facing in terms of adopting
electric vehicle, there is a discussion that we can have.
And yes, there is the discussion whether electric vehicles are actually that much cleaner than
petrol vehicles or not, or do they simply just transport the pollution from your city
to somewhere else and we can discuss that in the comments if you like as well.
And that was our primer on the new FAME II subsidy rules.
Tell us what do you think.
And if you want other topics covered, just leave us a comment
we'll get to it as soon as we can.
Thank you so much for watching.
This is PowerDrift.