Curtains for FAME-II subsidy for EVs? Good for the industry, says BNC Motors

Chennai: Come March, it is curtains for the Faster Adoption and Manufacturing of Electric Vehicles in India-II (FAME-II) subsidy scheme for the purchase of electric vehicles (EVs) it seems.

Finance Minister Nirmala Sitharaman who presented the Interim Budget on Thursday, was silent on continuation of the scheme while announcing a rooftop solarisation programme which would also propel EV charging infrastructure.

The Indian Government had earlier announced that the FAME-II subsidy scheme would come to an end on March 31, 2024.

Contrary to the hopes of the EV manufacturers, Sitharaman did not announce an extension of the scheme.

Reacting to the Interim Budget, Anirudh Ravi Narayanan, CEO of BNC Motors Pvt Ltd, that makes electric two wheelers (EV 2W) said, “The decision to not extend subsidies for EVs is a welcome move and one that BNC has been anticipating for a long time.”

“The Indian EV 2W market has achieved a certain level of adoption now where we don’t require demand-side subsidies, and just the Goods and Services Tax difference between Internal Combustion Engine vehicles at 28 per cent and EV at 5 per cent, serves as a sufficient incentive,” Narayanan added.

According to him, it is time now for the Indian EV industry to wean off from subsidies and start to work on cost reductions and operational improvements.

“Being cost-competitive will be very important if we hope to beat Chinese companies in international markets,” Narayanan said.

Meanwhile, the other EV industry players are maintaining a big silence on FAME-II coming to an end in March 2024.