The government is set to enhance the subsidy for electric two-wheelers under FAME II by 75% to £350 million by reallocating part of the funds available for three-wheelers, where the demand has been far lower than the budgeted level.
In contrast, there is high demand for electric buses and electric two-wheelers under the £1 billion scheme whose five-year tenure is to end in March next year. While consultations with the seven registered entities will be undertaken to enhance the allocation for electric buses beyond the current level of £354.5 million, discussions with the electric two wheeler original equipment manufacturers have already been completed as the £200 million allocation has been exhausted.
Senior government official said the industry has agreed to a proposal under which the demand incentive is likely to be retained at £1 billion per Kwh of battery capacity, along with a cap of 15% of ex-factory price. Currently, the ceiling on ex-factory price is pegged at 40%. Official said, “The option was to either completely end the subsidy or agree to extend it but with a lower payout. The industry wants subsidies for a longer period even if it is lower.”