The government's reduction in the FAME subsidy for electric scooters in India, which came into effect from June 1, has led to price hikes by electric vehicle manufacturers. The price increases for e-scooters are expected to range from Rs 10,000 to Rs 40,000, as companies anticipate subsidy losses ranging from Rs 10,000 to Rs 60,000.

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The government has lowered the subsidies from 40 percent to 15 percent of the vehicle cost. Some manufacturers have chosen to pass on the increased costs to customers, while others have absorbed a portion of the subsidy loss themselves.

Anshul Khandelwal, Chief Marketing & Revenue Officer at Ola Electric, in an interview to CNBC-TV18 said that despite the price increases of Rs 15,000, the company is still experiencing strong demand for its products. He said, Ola Electric expects subsidy losses of approximately Rs 35,000 per scooter. Khandelwal expressed confidence that these changes are short-term challenges and believes that the price increases will not significantly impact consumer demand.

"As far as subsidies are concerned, I think it is part of a longer game. In short term none of these hiccups matter, we feel they are bumps. Of course there has been a subsidy loss of anywhere between Rs 25,000-35,000. As far as price increases are concerned, we have increase the price of our two scooters by Rs 15,000. However even with these price increases they are the most affordable e-scooters in the market. We think that the price increase is not something which the consumer is too bothered about and in a matter of week or two, we should be back on the growth trajectory," Khandelwal said.

Bajaj Auto, Ather Energy, and Greaves Cotton are among the other companies that have also announced price hikes. Ravneet Phokela, Chief Business Officer at Ather Energy, stated that the company is facing a subsidy loss of Rs 32,000 per unit. Ather Energy has decided to absorb a portion of the subsidy loss in its financials and has increased prices by about Rs 7,000 for its flagship products.

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"The subsidy loss that we have per unit is about Rs 32,000. The easiest scenario would have been to pass the entire thing on to customers which is not a prudent thing to do. So what we have done is, we have looked at the portfolio and decided to absorb some part of it in our financials and the rest we have to pass on. So instead of taking a blanket number across all products, we have looked at each product individually, and hiked prices by about Rs 7,000 for our flagship products," Phokela said.

Phokela also expects volumes of e-scooter sales to decrease slightly over the next 3-4 months but not significantly.

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