Indian Government’s Loan, Insurance, and Subsidy Schemes for Electric Scooters and Bikes

Beginning

With the rise in fuel prices and growing environmental concerns, the Indian government is actively promoting electric vehicles (EVs), particularly electric scooters and bikes. To make EVs more affordable and accessible, the government has introduced various financial assistance schemes, including subsidies, insurance benefits, and easy loan options.

This article provides an in-depth guide to all the available schemes, eligibility criteria, benefits, and application processes.

Government Subsidies for Electric Scooters and Bikes

1. FAME India Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)

The FAME India Scheme is a flagship initiative aimed at promoting electric mobility in India. The scheme has been implemented in two phases:

FAME-I (Launched in 2015)

• Focused on promoting electric and hybrid vehicles through demand incentives.
• Provided subsidies for electric two-wheelers, three-wheelers, and four-wheelers.

FAME-II (Launched in 2019, ongoing)

• With a budget of ₹10,000 crore, FAME-II aims to support 7,000 electric buses, 5 lakh e-rickshaws, and 10 lakh electric two-wheelers.
• Subsidy provided for electric scooters and bikes is ₹10,000 per kWh of battery capacity.
• The maximum subsidy for an electric two-wheeler is ₹15,000 per vehicle.

Eligibility Criteria:

• The electric scooter/bike must have a minimum range of 80 km per charge.
• The top speed must be at least 40 km/h.
• Must be equipped with a lithium-ion battery (lead-acid batteries are not eligible).

2. State-Wise Subsidies on Electric Vehicles

Apart from the central FAME-II subsidy, various states provide their own incentives to encourage EV adoption. Here’s a breakdown of subsidies in major states:

Maharashtra

• Subsidy Amount: ₹5,000 per kWh (maximum ₹25,000 per vehicle).
• Road Tax Exemption: 100% waiver.

Delhi

• Subsidy Amount: ₹5,000 per kWh (maximum ₹30,000 per vehicle).
• Additional Benefits: Free registration and road tax exemption.

Gujarat

• Subsidy Amount: ₹10,000 per kWh (maximum ₹20,000 per vehicle).
• Registration Fee Waiver: Yes.

Tamil Nadu

• Subsidy Amount: ₹5,000 per kWh.
• Road Tax Exemption: 100% waiver.

Rajasthan

• Subsidy Amount: ₹2,500 per kWh (maximum ₹10,000 per vehicle).

Assam

• Subsidy Amount: ₹10,000 per kWh (maximum ₹20,000 per vehicle).
• Road Tax Exemption: 100% waiver.

Government Loan Schemes for Electric Scooters and Bikes

To make EVs more affordable, the government has partnered with banks and NBFCs to offer low-interest loans for electric scooters and bikes.

1. SBI Green Car Loan Scheme

• Interest Rate: 7.75% – 8.5% per annum.
• Tenure: Up to 7 years.
• Down Payment: 10% – 15% of the vehicle cost.
• Eligibility: Salaried individuals, self-employed professionals, and businesses.

2. ICICI Bank EV Loan

• Interest Rate: 8% – 10% per annum.
• Loan-to-Value Ratio: Up to 85% financing.
• Processing Fee: 0.5% of the loan amount.

3. HDFC Two-Wheeler EV Loan

• Interest Rate: 7.5% – 9.5%.
• Maximum Loan Amount: ₹2,00,000.
• Special Discounts: Women applicants and government employees get 0.5% lower interest rates.

4. Bajaj Finserv EV Bike Loan

• Zero Down Payment: Available for select models.
• EMI Starting at ₹999/month.
• Flexible Tenure: 12 to 60 months.

Insurance Benefits for Electric Scooters and Bikes

The government and insurance providers offer special benefits for EV insurance:

1. Third-Party Insurance Premium Reduction

• IRDAI has reduced third-party insurance rates for electric two-wheelers compared to petrol models.
• The discount is approximately 15%-20%.

2. Comprehensive Insurance Plans

• Covers damages from accidents, theft, fire, and natural disasters.
• Includes personal accident cover up to ₹15 lakh.
• Offers cashless claim settlements at network garages.

3. No-Claim Bonus (NCB) for EVs

• Policyholders get up to 50% discount for claim-free years.
• Encourages responsible driving habits among EV owners.

How to Apply for EV Subsidies, Loans, and Insurance

Step-by-Step Process to Avail Government Subsidies

1. Choose an eligible electric scooter/bike that qualifies under FAME-II and state policies.
2. Purchase from an authorized dealer who provides subsidy benefits upfront.
3. Submit required documents (Aadhaar card, PAN card, vehicle invoice, and bank details).
4. Government transfers the subsidy directly to the dealer, reducing the upfront cost.

Process for EV Loan Application

1. Check your credit score (should be 650 or above for easy approval).
2. Select a bank/NBFC offering EV loans.
3. Submit documents (identity proof, income proof, and vehicle details).
4. Loan approval and disbursal happen within 24-72 hours.
5. Start EMI payments after loan disbursal.

Steps to Get EV Insurance

1. Compare policies online (via Policybazaar, Coverfox, etc.).
2. Choose a policy that includes both third-party and comprehensive coverage.
3. Provide vehicle details and personal information.
4. Make payment online and receive the policy instantly.

Conclusion

The Indian government’s initiatives, such as the FAME-II scheme, state subsidies, loan options, and reduced insurance premiums, make electric scooters and bikes an attractive choice for consumers. With increasing support from financial institutions and insurance companies, the transition to electric mobility is becoming smoother and more affordable.

If you’re planning to switch to an EV, make sure to take advantage of these benefits to enjoy cost savings and contribute to a greener future!