Electric vehicles (EV) manufacturers' body SMEV has asked the Heavy Industries Ministry to reconsider the proposed cap of incentive to 20 per cent of ex-factory price of EVs under FAME II scheme, saying it would adversely affect the two-wheelers segment.
In a letter to Heavy Industries and Public Enterprises Minister Anant Geete, the Society of Manufacturers of Electric Vehicles (SMEV) said if the proposed cap is implemented the cost of mass use electric two-wheelers will shoot up.
"There is a limit of 20 per cent of the ex-factory price on the incentive. This is drastically reducing the incentive on affordable e-two wheelers, making them unaffordable for the common man," said SMEV Director Sohinder Gill in the letter.
It is very clear that two-wheeler customers will not pay much higher than petrol two-wheelers at least for the next few years till the total cost of ownership advantage is clearly established, he added.
Stating that maximum price adoption would happen at prices similar to basic petrol two-wheelers priced between Rs 50,000 and Rs 65,000, Gill said under the proposed FAME II scheme, prices of e-scooter with speed of 50kmph and range of 70 km would be costlier by Rs 9,013 when compared to FAME I (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme.
"Majority of volumes of sales are at these affordable price points and therefore leading to a major reversal of e-mobility," he said in the letter.
When contacted, Gill told PTI, "If the proposal is implemented as it is under FAME II, then many of our members are unlikely to continue to sell electric two-wheelers as they play only in the mass segment."