Starting April 1, 2024, potential buyers of electric scooters in India may face a significant price hike, with costs projected to increase by up to 10 percent. This forecasted surge, as predicted by the Investment Information and Credit Rating Agency of India Limited (ICRA), could have notable implications for the affordability of electric two-wheelers (e-2Ws) across the country.
Reasons Behind the Price Increase
The impending price hike comes at a crucial juncture for the electric scooter market, which has been experiencing robust growth. However, the surge in upfront costs is a result of changes in the Electric Mobility Promotion Scheme 2024 (EMPS). Under this new scheme, subsidies for e-2Ws have been revised downward from Rs 10,000/kWh to Rs 5,000/kWh. Additionally, the maximum benefit per vehicle has been capped at Rs 10,000.
ICRA’s Projections
Despite this temporary setback, ICRA projects that e-2W penetration will reach 6-8 percent of the overall industry by fiscal year 2025. The Indian government’s EV policy landscape also includes incentives aimed at fostering domestic manufacturing of electric vehicles. Companies investing in EV manufacturing in India stand to benefit from these incentives, with expectations high for players like Tesla to finally arrive on Indian shores.
While the exact impact on individual scooter models remains to be seen, this potential price hike could affect the affordability of electric scooters, particularly for budget-conscious buyers. However, it also means that now is an opportune time to purchase an electric scooter and save big before the FAME-II scheme expires.
