The Ola S1, India's top-selling electric scooter, has recently undergone a significant price increase. This price hike comes as a result of the government's decision to reduce subsidies for electric two-wheelers under the FAME-II scheme. Premium electric two-wheelers (E2W) now qualify for a much lower incentive, leading to an increase in the cost of the Ola S1. In this article, we will explore the details of the price hike and its implications for Ola Electric and electric scooter buyers in India.
Reduction in FAME-II Subsidy
Under the revised FAME-II scheme, the subsidy for Ola's e-scooters has been reduced by amounts ranging from Rs 24,000 to Rs 37,000. Previously, the Ola S1 Pro, equipped with a 4 kWh battery pack, qualified for a total subsidy of Rs 59,550. However, with the new regulations capping incentives at 15% of the E2W's ex-factory price and revising the subsidy to Rs 10,000 per kWh of battery capacity starting from June 1, the maximum incentive for the S1 Pro is now Rs 22,268. Similarly, the total subsidy for the S1 has decreased from Rs 44,700 to Rs 20,678. As a result, the on-road prices of the S1 and S1 Pro in Mumbai now stand at Rs 1.45 lakh and Rs 1.55 lakh, respectively.
Impact on Other Electric Two-Wheelers
The Ola S1 is not the only electric vehicle affected by the reduction in subsidies. The Matter Aera electric motorcycle has also seen a price increase. The Aera, originally launched at Rs 1.44 lakh for the 5000 variant and Rs 1.54 lakh for the 5000+ variant earlier this year, will now cost Rs 1.74 lakh and Rs 1.84 lakh (ex-showroom) respectively, starting from June 6. This means that the Aera, initially positioned as a sporty alternative to petrol commuter motorcycles, will now cost, or even exceed, Rs 2 lakh on-road. Other leading manufacturers, including Ather Energy, Bajaj Auto, TVS, Hero MotoCorp (Vida), and Tork Motors, are also expected to announce price hikes for their electric models soon.
Ola Electric's Strategy
The Ola S1 has played a crucial role in Ola Electric's success. The introduction of the more affordable S1 variant led to a surge in sales for the start-up, making it the best-selling E2W in the country and maintaining its market leadership for an extended period. Ola Electric's marketing campaigns urging customers to purchase the S1 and S1 Pro before the price increase have proven successful, with over 26,000 units sold in May, the highest monthly figure for Ola to date, according to the latest registration data. Despite the price increase, Ola Electric plans to introduce the more affordable S1 Air e-scooter in July. Additionally, Ola is preparing to launch the S1 Air, a basic version of the S1 with different specifications and battery options ranging from 2 kWh to 4 kWh, at price points ranging from Rs 85,000 to Rs 1.10 lakh (ex-showroom).
Conclusion
The reduction in subsidies has led to a significant price increase for the Ola S1 and other electric two-wheelers in India. As the government adjusts its policies and incentives, electric vehicle manufacturers are faced with the challenge of maintaining affordability while delivering quality products. Ola Electric's response includes introducing more affordable variants and expanding its product lineup to cater to a wider range of customers. Despite the price hike, the demand for electric scooters remains strong, indicating a positive shift towards sustainable mobility in the country.
