Electric two-wheeler segment will grow in India despite FAME II subsidy cut: TVS

The Indian electric two-wheeler industry will grow stronger in coming days despite FAME II subsidy cuts raising concerns over possible drop in sales. TVS Motor, one of the leading two-wheeler manufacturers, believes that India will soon become a major hub for electric two-wheelers as well as for e-scooter and e-motorcycle exports. TVS Motor, which currently sells iQube electric scooter in India. The two-wheeler manufacturer plans to expand its electric two-wheeler portfolio in coming days.

TVS Motor's statement comes weeks after the Centre approved proposal by the Ministry of Heavy Industries to reduce subsidy on electric two-wheelers bought on or after June 1. The notification issued by the ministry says a customer will only get 15 per cent of the overall cost of the electric two-wheeler back as subsidy. In its Annual Report for 2022-23, TVS Motor said, "The EV industry will continue to grow rapidly as the consumer interest is buttressed with active policy support from the Central and State Governments through PLI, FAME II and State-specific support policies." Like in ICE (internal combustion engine) two-wheelers, India will emerge as a major hub for EV two-wheeler exports in addition to the large domestic market."

Under the FAME-II scheme, the demand incentive on electric two-wheelers has been revised to ₹10,000 per kWh. Besides, the cap on incentives for electric two-wheelers is now capped at 15 per cent of the ex-factory price of vehicles from 40 per cent earlier.

TVS Motor is also focussing on expanding its EV footprint in India. The reports says that the manufacturer aims to ‘expand the portfolio to new variants within iQube and introduce new brands’. TVS Motor will also introduce new innovative features and technology in coming days. It will also expand its footprint beyond 130 cities in India currently, as well as outside India. "In addition, with the strategic association with BMW, the company is involved in joint design and development of urban EV options for the global markets," TVS Motor said.

According to the two-wheeler manufacturer, EV two-wheeler penetration in the last financial year was at 4.7 per cent. TVS said it has been made possible due to the incentives offered under the FAME II and PLI schemes.