Higher price tags due to lack of subsidies takes a toll on electric 2-wheeler sales.
Electric 2-wheeler sales dropped sharply in the April-June 2019 quarter due to the high price tags. The phase of FAME-India scheme implemented strict localisation norms due to which many manufacturers failed to meet the eligibility criteria. The revised norms of eligibility for FAME-India scheme makes it difficult for the manufacturers to avail the government subsidies. The 2nd phase of the FAME-India scheme came into effect since 1st April 2019.
As per Society of Manufacturers of Electric Vehicles (SMEV), only 1700 electric 2-wheelers were sold in India under FAME-scheme in the June quarter. In the corresponding period of the previous year, around 30,000 electric 2-wheelers were sold in India under the same scheme. Currently, only 5 manufacturers have managed to get the eligibility certificate for the subsidy scheme. As per SMEV, Ather Energy, Ampere, Okinawa, Jitendra Electric Vehicles, and Hero Electric are the 5 manufacturers which can avail the subsidy.
To receive a subsidy under FAME-India, electric 2-wheeler makers must source more than 50% of the components locally. Once all the demands are met, the manufacturer can get eligibility certificates from the concerned authorities. The benefits are only limited to vehicles using lithium-ion batteries.
Speaking about the issue, Hero Electric said that sourcing batteries in India was a major setback as no one was making them in the country. However, a couple of local manufacturers are now manufacturing the batteries and selling them to the companies.
An electric 2-wheeler is eligible for a subsidy only if it has a 10,000 per kWh (kilowatt-hour) of battery capacity. A little less than 90 2-wheelers were eligible for subsidy under FAME-India scheme in its 1st phase. These were sold by 18 manufacturers. A majority of these vehicles couldn’t meet the new criteria and thus lost financial support from the government. A sum of Rs. 2000 crores has been earmarked in the FAME India scheme for supporting the sale of a million electric 2-wheelers by the end of March 2022.
Electric 2-Wheeler Sales
– Only 5 manufacturers eligible for subsidies under FAME-India scheme
– Sales drop due to high price tag on the products
– 2nd phase of FAME-India scheme imposes strict localisation norms
Source – ETAuto.com