The rising fuel prices, concern for the environment, and increasing enthusiasm towards electric vehicles is leading to growth in the adoption of 2-wheeler electric vehicles along with other factors. However, as per a new report, this growth can be hindered. As per Crisil report, the chances are that the price of electric scooters can go up by up to Rs 45,000 in the fiscal year 2025.
The reasons for increased adoption can be seen in the form of government support for the use of electric vehicles. This support comes in the form of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) scheme under the National Electric Mobility Mission Plan. In addition, there are subsidies offered by states.
Apart from the government support, other factors contributing to the growth can be better cost economics, the availability of different models, and the viability of home-charging choices, to name a few, which are all factors to consider.
As per the new Crisil report the subsidies, which bridged the cost gap between EVs and traditional, internal combustion engine (ICE) options, have been a primary driver of EV penetration in India.
In fiscal 2022 and fiscal 2023, the total cost of acquisition of electric scooters will be Rs 7,500-9,500 lower than that of ICE counterparts, according to the report. This is due to the FAME II subsidy, which is set to expire in fiscal 2023, a year later than the government’s timetable.
After the expiration of the scheme, electric scooters will cost Rs 45,000 more in comparison to fiscal 2023. A Rs 45,000 FAME II subsidy and a Rs 10,000 registration incentive would be included in the breakdown. The total cost of acquisition is also expected to rise by Rs 18,000-20,000 during fiscal years 2023 and 2025, according to the research.
After the FAME scheme ends, the EV adoption can be supported by the new PLI scheme supporting the hydrogen fuel cell vehicles and EVs starting from 2023. The PLI scheme is expected to keep a leash on the total cost of acquisition and control increase in prices.