Subsidies on Electric Bikes and Scooters in India

Posted on: May 10, 2023 | | Written by:

Subsidies on Electric Bikes and Scooters in India

Published on May 10, 2023. EST READ TIME: 3 minutes

Instant access to power, agility, no sound pollution, and no emissions. There are a lot of reasons why electric vehicles are getting more popular by the day. If you are someone who is considering buying an electric scooter or bike, there is something even more interesting in store for you. Did you know about the subsidy on electric scooter?

The central government has pledged to make the country a zero-carbon-emitting country by 2070. And in a bid to achieve that, there has been a strong push for electric vehicles. Subsidy on electric scooter is one of the ways by which the government wants to make the proposition of buying an EV even more attractive. If you are planning to buy any of the best electric bikes in India , there is a good chance that you will receive a subsidy for the same. Here is all that you need to know about it.

Government subsidy on electric vehicles

The central government has come up with several initiatives to support the EV ecosystem. Some of these include incubator programs, tax breaks for customers, CGSS for start-ups (Credit Guarantee Scheme for Start-ups), and sharing of facilities when it comes to small-scale industries. The most prominent step is electric scooter subsidy.

The FAME scheme was introduced back in 2015 to incentivise the purchase of Electric Vehicles. The intention of the scheme was to provide support for EV infrastructure and provide subsidies upfront on the purchase of electric vehicles.

Understanding the FAME scheme for EV subsidy

The scheme was introduced in 2015 for an initial 2-year period, but it got extended till 2019. FAME stands for Faster Adoption and Manufacturing of Electric Vehicles in India. The scheme aimed to promote the manufacturing of electric and hybrid vehicles to promote sustainability.

In the first phase, the government installed 427 EV charging stations and allotted Rs. 895 crores for various operations. During the first phase, nearly 2.8 lakh EVs were supported by a fund value of Rs. 359 crores.

Understanding the FAME II scheme for EV subsidy

Phase 2 of the FAME scheme aims to further the benefits of the first phase and aims at promoting the electrification of public transport as well as shared transportation. The subsidy on electric scooter continues with the FAME II. Here are the major highlights of the scheme.

1. The government has set aside a budget of Rs. 10,000 crores for the second phase.

2. According to the second phase, the government plans to install 2700 EV charging stations across different cities, hill stations, and cities that have a population of more than a million. The grid will measure across a 3km x 3km layout.

3. The government intends to establish EV charging stations on highways as well. There will be a gap of 25 kilometres between two consecutive charging stations.

4. The scheme will offer Rs. 20,000 as electric scooter subsidy to more than 10 lakh registered electric two-wheelers.

5. The scheme will also offer subsidies to more than 35,000 four wheelers.

6. More than 5 lakh e-rickshaws will receive Rs. 50,000 as incentives.

7. The scheme will offer subsidies to more than 8000 electric buses.

Requirements for FAME II

The following are some of the requirements that EVs must meet to receive the benefits of the FAME II scheme.

1. The ex-showroom price of electric buses should be Rs. 2 crores or more, and the subsidy for buses is Rs. 50 lakhs.

2. The ex-showroom price of four wheelers should be Rs. 15 lakhs or more, and they will receive Rs. 1.5 lakhs as incentives.

3. Hybrid four wheelers that have an ex-showroom price of Rs. 15 lakhs or more will receive incentives between Rs. 13,000 and Rs. 20,000.

Top EV-friendly states that offer the best incentives to buyers

If you are looking for a subsidy on electric scooter, the following are some of the states that offer the most subsidies.

State	Maximum subsidy available	Road tax exemption
Maharashtra	Rs. 25,000	100%
West Bengal	Rs. 20,000	100%
Bihar	Rs. 20,000	100%
assam	Rs. 20,000	100%
Meghalaya	Rs. 20,000	100%
Gujarat	Rs. 20,000	50%
Rajasthan	Rs. 10,000	N/A
Odisha	Rs. 5,000	100%

Apart from the above, states such as Karnataka, Tamil Nadu, Uttar Pradesh, Punjab, Telangana, Andhra Pradesh, and Madhya Pradesh offer 100% road tax exemption on buying an EV.

Need for EV insurance:

Buying electric bike insurance is mandated as per the law. However, there are a few other benefits apart from merely meeting the requirements of the law. Here are some of them.

1. Liabilities against third parties.

In the unfortunate event of an accident that involves third parties, the policy will protect you and your finances. It will safeguard your finances if there are any damages or injuries to third parties.

2. Avoid paying hefty penalties.

Buying electric bike insurance will ensure that you do not end up paying a hefty fine of Rs. 2,000 for riding without insurance. It is an easily avoidable offence.

3. Avoid large repair bills.

When you opt for comprehensive bike insurance, you get protection against damages to your vehicle. The damages could be due to an accident, natural calamities, vandalism, riots, etc. It also protects your EV against theft and burglary. Considering the slightly higher prices of electric vehicles, opting for comprehensive bike insurance is a sensible option.

Conclusion

Before getting your hands on any of the best electric bikes in India, understanding electric scooter subsidy is important. Given the higher sticker price of EVs, the subsidy on electric scooter can help you bring down the cost of ownership by a considerable margin. You can use the above information to deduce the subsidies that you are eligible for. irrespective of which EV you choose, do not forget to insure it.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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