The subsidy per electric two-wheeler, which is linked to the battery size, was increased from Rs 10,000 per kilowatt hour to Rs 15,000. Meanwhile, the maximum available subsidy cap was raised from 20% of the price of the vehicle to 40%.
The government also announced that Energy Efficiency Services Limited (EESL), a public-sector owned company, will aggreagate demand for 300,000 electric three-wheelers and an unspecified number of electric buses.
This is part of the Faster Adoption and Manufacturing of Electric Vehicles in India Phase II scheme (FAME II) which has a financial outlay of Rs 10,000 crore to promote EV adoption in the country.
Subsequently, the Ather 450, one of the popular models which is subsidised increased from Rs 30,000 per unit to Rs 45,000.
“… demonetization moment for the EV industry,” Tarun Mehta, the co-founder and chief executive of Ather Energy said on Twitter.
“Just like how demonetisation overnight gave a boost to the fintech industry, this will boost the EV industry,” he told ET over the phone.
As per Mehta, the increased subsidy will significantly speed up electrification in India.
“The industry would have needed a few more years to build more volume and get competitive on upfront price with combustion engine vehicles,” he explained. “The new subsidy solves that. It will convince a lot of fence-sitting consumers to adopt electric vehicles.”