Hero Electric Says 'No Price Hike' Post Fame II Subsidy Cut, Here's Why

Beginning June 1, the FAME-II subsidy will experience a large reduction. In the middle of this, Hero Electric, one of the country's leading EV manufacturers, declared that it will not be implementing any price hike across its model range.

By Reetika Bhatt | on June 1, 2023 Follow us on Autox Google News

Beginning tomorrow (June 1), the FAME-II subsidy will experience a large reduction, which will require the majority of EV two-wheeler producers to promptly alter their prices. In the middle of this, Hero Electric, one of the country's leading EV manufacturers, declared that it will not be implementing any price hike across its model range. For those who are unaware, the Indian government recently reduced the FAME II scheme's subsidy for electric two-wheelers, leading to a substantial increase in pricing for the entire segment. Hero Electric, however, asserts that it understands the necessity of supporting buyers during this period of change and is working to keep electric mobility accessible and cheap. Read on to know why the bikemaker has decided not to hike the prices for its model post the Fame II subsidy cut.

Also Read: Ola S1 Air Electric Scooter Deliveries to Begin in July, Confirms CEO Bhavish Aggarwal

Why Hero Electric Won't Be Implementing a Price Hike?

Despite the recently reduced FAME II subsidies, Hero Electric has stated that it would not raise the cost of its e-scooter models. The reason behind the step as stated by the automaker is that it remains committed to encouraging the use of electric two-wheelers and addressing misconceptions regarding their ownership costs.

There is no doubt that India is one of the largest two-wheeler markets, and Hero Electric claims that it wants to meet the needs of buyers from all walks of life by offering inexpensive and environmentally friendly mobility options. The EV maker intends to persuade more customers to switch to electric vehicles by maintaining the prices of its line of e-scooters at their current levels.

The Impact of Fame II Subsidy Cut

The Ministry of Heavy Industries has cut the FAME-II subsidy, raising the price of electric vehicles. The maximum amount of subsidies available for electric two-wheelers has been decreased from 40% to 15%. Subsidies for electric two-wheelers have been reduced from Rs 15,000 to Rs 10,000 per kWh of battery capacity. For context, the Ather 450X Pro Pack is currently available for Rs 1.28 lakh (ex-showroom, Bengaluru), a reduction of Rs 55,500 from its original price. The subsidy would instead be decreased to Rs 37,000 under the new rules. There will be a comparable outcome for the remaining electric scooters and bikes sold in India. 

It is important to note that any two-wheeler must meet the requirements in order to be eligible for the subsidy. These specifications include a minimum range of 80-kilometre, a top speed of at least 40km/h, and a specific level of localisation. Several state governments also give an additional subsidy. But they vary from one state to another.

Also Read: Matter Aera Electric to Become Expensive by Rs 30,000 From June 6, Here's Why

Here's What the Brand Says

Sharing his thoughts on the company's decision, Sohinder Gill, CEO, of Hero Electric, said, "The sudden and sharp tapering of subsidies does not bode well with the customer and may lead to the drop in the E2W adoption. The industry may still clock higher sales than the last year but may not be able to keep the tempo of the exponential growth and may even fall short of the target of 2.3 million units as projected by Niti Aayog. Despite the extreme financial crunch forced upon us due to subsidies stuck with MHI for over 15 months, we will continue to do our bit in offering affordable mobility solutions to discerning customers by holding on to our current prices till we can."

"In our 15 years of business we have time and again been facing a lot of headwinds from those who do not want "affordable electric mobility' to become a popular choice of the customers, but we know for a fact that a mobility solution that is fundamentally so good for the pocket, good for the country and good for the humanity can never be pushed down indefinitely," he further continued.

Tags: Hero Electric Hero Electric Price Hike Price Hike Fame II Subsidy Cut

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