Electric scooter prices in India are poised to increase by up to 10 percent starting April 1, 2024, impacting the affordability of these eco-friendly vehicles. This anticipated hike, as predicted by ICRA, is a result of changes in the Electric Mobility Promotion Scheme 2024, leading to reduced subsidies. Despite this challenge, the electric two-wheeler market is expected to grow, with a projected penetration rate of 6-8% by 2025.
Anticipated Price Hike for Electric Scooters
As we approach April 1, 2024, potential buyers of electric scooters in India should prepare for a significant price hike, estimated to be as high as 10 percent. This surge, as forecasted by the Investment Information and Credit Rating Agency of India Limited (ICRA), could have significant implications for the affordability of electric two-wheelers (e-2Ws) nationwide.
Reasons Behind the Price Surge
The impending price hike comes at a crucial juncture for the electric scooter market, which has been witnessing robust growth. However, the increase in upfront costs can be attributed to the new Electric Mobility Promotion Scheme 2024 (EMPS), which offers reduced subsidies for e-2Ws compared to the expiring FAME-II scheme.
Under the EMPS, the subsidy for electric two-wheelers has been revised downward from Rs 10,000/kWh to Rs 5,000/kWh, with a maximum benefit per vehicle capped at Rs 10,000.
“Buyers of electric scooters may experience a significant price rise starting April 1, 2024, due to the revised subsidy structure under the Electric Mobility Promotion Scheme 2024,” stated an ICRA spokesperson.
Positive Outlook Despite Challenges
Despite this temporary setback, ICRA remains optimistic about the growth of e-2Ws, projecting a penetration rate of 6-8% by fiscal year 2025. Additionally, the Indian government’s EV policies include incentives to promote domestic electric vehicle manufacturing. Companies investing in EV production in India are expected to reap the benefits of these incentives, with anticipation building for the entry of major players like Tesla into the Indian market.
Considerations for Buyers
While the specific impact on individual scooter models remains to be seen, the potential price hike underscores the importance of making a purchase now to secure savings before the FAME-II scheme expires. Budget-conscious buyers may find it prudent to act swiftly to capitalize on current pricing advantages.
This rewritten content provides detailed insights into the anticipated price hike for electric scooters in India, its causes, implications, and opportunities for buyers, presented in an engaging and SEO-friendly manner.