EV stocks in India get a boost with EMPS scheme: Top EV stocks to benefit

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electric two-wheelers (e2W) and three-wheelers (e3W) across the country. The scheme has been allocated a budget of ₹5 billion and is set to replace the FAME-2 scheme, which expires on 31 March 2024. It will operate from April to July 2024, with the possibility of being replaced or extended thereafter.

The primary goal of the EMPS is to foster the adoption of e2Ws and e3Ws, with a secondary objective of gradually reducing the industry's reliance on subsidies. The government has reduced the maximum subsidy for e2Ws to ₹10,000 per vehicle, down from ₹22,500, and for e3Ws to ₹50,000 from ₹111,505. Additionally, both vehicle categories will benefit from an incentive of ₹5,000 per kilowatt-hour (kWh).

This strategic move has been widely applauded for benefiting both manufacturers and consumers alike. Mahendra Nath Pandey, minister for heavy industries, had said, "The reduction in subsidy is in response to the heightened demand. Our aim is to strengthen the industry while preparing it for a future without subsidies.

The ₹500 crore allocation will support approximately 400,000 e2Ws and e3Ws over four months." Notably, the EMPS does not offer incentives for electric four-wheelers (e4Ws) and e-buses, due to the existence of other schemes catering to these vehicles, such as the Auto PLI and PM-eBus Sewa Scheme. Conversely, the EMPS is specifically designed for e2Ws and e3Ws. The automotive industry had anticipated an extension of the FAME-2 scheme, which includes e4Ws in its coverage.

Tata Motors, for instance, had advocated for a three-year extension of FAME-2 for four-wheelers, although no extension was granted this time. India ranks as the third largest auto market globally, trailing only China and the US. The EV market within