No FAME, no growth: Ather Energy CEO has a warning on EV subsidies

Chandigarh: Ather Energy's CEO and co-founder, Tarun Mehta, expressed concerns about the withdrawal of the government's incentive on the sale of electric two-wheelers in April. According to Mehta, this move could lead to one or two more years of stagnated growth in the industry.

While the industry is no longer solely dependent on subsidies for survival, an early discontinuation of the subsidy in April would require industry players to tighten their belts and work harder. Despite their resilience, this scenario would still result in a delay in achieving the industry's growth targets.

The central government provides incentives for the sale of electric vehicles under the FAME-II scheme, which will end in March this year. In June last year, the government already reduced the subsidy amount and the maximum subsidy cap for electric two-wheelers.


Also Read: How costly will electric two-wheelers be sans subsidy?
Mehta highlighted the negative impact of a sudden subsidy reduction, stating that the electric two-wheeler industry lost a year of growth in 2023. He also mentioned that Chandigarh, known for its advanced adoption of electric vehicles, could be affected by the absence of the FAME scheme.

The FAME scheme plays a vital role in promoting the adoption of electric vehicles and hybrids throughout India. It contributes to reducing pollution and decreasing reliance on fossil fuels. Affordability remains a key driver for the widespread adoption of electric two-wheelers in the country. However, high battery costs and supply constraints on components have historically made electric vehicles more expensive. The FAME scheme has helped mitigate these challenges by providing incentives that make electric mobility more economically viable for consumers.

In conclusion, the withdrawal of the government's incentive on the sale of electric two-wheelers in April could have a negative impact on the industry, leading to a delay in growth. The FAME scheme has played a crucial role in promoting electric mobility and addressing affordability challenges.