Don’t wait to buy electric scooters, prices could go up by Rs 45,000 by 2025: Report

India is seeing major growth in electric two-wheeler adoption, due to them becoming more economically feasible. However, according to a new Crisil report, there is a  possibility of electric scooters becoming costlier by Rs 45,000 in fiscal 2025.

The rapid adoption is being aided by the government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) scheme under the National Electric Mobility Mission Plan along with other subsidies offered by various states. Some other aspects propelling the adoption rate to such heights include better cost economics, availability of multiple models, and feasibility of home-charging options to name a few.

According to the Crisil report, the major push for the penetration of EVs in India has been largely driven by subsidies, which bridged the cost gap between EVs and traditional, internal combustion engine (ICE) alternatives.

The report further states that the total cost of acquisition (TCA) of electric scooters would be lower than that of ICE variants by Rs 7,500-9,500 in fiscal 2022 and fiscal 2023. This is owed to the FAME II subsidy, which is expected to get over in fiscal 2023, as against the government deadline of a year later. This will then cause electric scooters to become costlier by Rs 45,000 compared with fiscal 2023. The breakdown would include Rs 45,000 FAME II subsidy and a Rs 10,000 registration incentive. The report also claims that the TCA will increase by Rs 18,000-20,000 between fiscals 2023 and 2025.

While the exhaustion of the FAME incentives is a major setback, the PLI scheme could drive EV adoption The latest PLI scheme for EVs and hydrogen fuel cell vehicles will begin in 2023, and can restrict any steep increase in TCA. THE PLI scheme is expected to push up the adoption of electric scooters, given the availability of more models and significantly lower pricing.

The electric motorcycle segment will also be eligible for the PLI benefit. There the TCA is expected to increase by Rs 15,000 from fiscal 2023 to fiscal 2025.

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