Electric Two-Wheeler Prices Surge as TVS, Ather, and Ola Adapt to Revised Subsidy Norms

TVS, Ather, and Ola Electric have announced a hike in prices of their electric two-wheelers as new subsidy norms come into effect from this week. The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, a government initiative that provided subsidies to electric vehicle manufacturers, has been revised, leading to a cut in subsidies. As a result, electric two-wheeler makers are revising their retail prices, and market experts estimate that prices may increase by 10-16%.

Ola Electric has already revealed its revised prices, with its S1 and S1 Pro models now priced at INR 1,29,999 and INR 1,49,999, respectively. Similarly, Ather Energy has announced revised prices for its 450X and 450 Plus models. The 450X will now cost INR 1,64,841, while the 450 Plus will be priced at INR 1,42,416. TVS has also announced an increase in prices, but the revised prices of its electric two-wheelers are yet to be disclosed.

The Society of Manufacturers of Electric Vehicles (SMEV) had earlier petitioned a Parliamentary Standing Committee on unpaid subsidies worth INR 12 billion ($162 million) due to a liquidity crisis among electric vehicle firms. The revised subsidy norms have added to the woes of the electric vehicle industry, which is already struggling to make a mark in the highly competitive two-wheeler market in India.

The government’s decision to reduce subsidies is aimed at promoting the development of local supply chains and reducing the dependence on imports. The FAME scheme was launched in 2015 with the aim of promoting the adoption of electric vehicles in the country. The scheme provided incentives to manufacturers to produce electric vehicles and to buyers to purchase them. The scheme was revised in April 2019, with a budget allocation of INR 10,000 crore ($1.4 billion) for a period of three years.

The revision in subsidy norms has come at a time when the electric vehicle market in India is witnessing a surge in demand. The rising fuel prices and increasing awareness about the environment have led to a growing interest in electric vehicles. The demand for electric two-wheelers has also been on the rise, with more consumers opting for them as a cost-effective and eco-friendly alternative to petrol-powered two-wheelers.

In conclusion, the hike in prices of electric two-wheelers by TVS, Ather, and Ola Electric comes as a result of the revised subsidy norms under the FAME scheme. The move is likely to impact the sales of electric two-wheelers in the short term but could also lead to the development of local supply chains in the long run. As the demand for electric two-wheelers continues to rise, it is important for the government to provide adequate support to the industry to ensure its growth and sustainability.

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