Electric two-wheeler makers oppose proposed incentives

Society of Manufacturers of Electric Vehicle (SMEV), a lobby group for electric vehicle manufacturing companies, has objected to certain anomalies in the proposed FAME 2 incentives segment of electric two-wheelers. In this regard, it has written to Heavy Industries minister Anant Geete, claiming that the government is erroneously promoting some electric two-wheelers that are not only costlier to own and run than the petrol two-wheelers but also wastes a lot of electricity and precious lithium.

FAME- 2, which stands for Faster Adoption and Manufacturing of Hybrid and Electric vehicles, is the second phase of the incentive scheme being provided to the consumers of electric vehicles (EVs) in India.

Drawing the attention of the minister towards certain set of e-scooters, Sohinder Gill, director, SMEV, in the letter said, “...seem to be more for the rich customers, shall we say rich boy toy that costs much more, consume more electricity and do not have advantage of running costs over petrol scooters.”

Gill said that in addition to it there is the skyrocketing battery replacement cost of these compared to the ones which are affordable, consume much less electricity, lower in running costs and have much lower battery replacement costs. “And the government seems to be keen to give three times subsidy to the rich boy toys!” added Gill.

SMEV, which has some of the leading automobile manufacturing groups as its members, including Mahindra Electric, Hero Electric, Ashok Leyland, Tata Motors, had last month raised concerns over FAME 2's proposed cap of 20% on ex-factory price of EVs. The SMEV officials added that the proposal if implemented will adversely affect the electric two-wheeler segment, keeping it out of the reach of the common man.

The first phase, which is called as FAME-1 was introduced in 2015 and offered incentives on hybrid and electricity vehicles up to Rs 29,000 for two-wheelers and Rs 1.38 lakh for cars. While phase 1 of FAME has been extended until September 30, or till the phase-2 gets approved by the Union cabinet. Phase-2 of FAME will have the financial support of about Rs 9,381 crore and is expected to last for around five years.

According to industry experts, the EV industry is at a nascent stage in India at present. It is less than 1% of the total vehicle sales but has a potential to grow to more than 5% in few years. At present, there are more than 4 lakh electric two-wheelers and few thousand electric cars on Indian roads as the industry volumes have been fluctuating, mostly depending on the incentives offered by the government.

More than 95% electric vehicles on Indian roads are low-speed electric scooters (less than 25km/hr) that do not require registration and licences. Almost all electric scooters run on lead batteries to keep the prices low, however, battery failures and low life of batteries have become major limiting factors for sales besides government subsidies.

ROUGH RIDE

• SMEV says promoting these electric two-wheelers are not only costly to own but they also waste a lot of electricity and precious lithium
   
• The lobby group had last month raised concerns over FAME 2's proposed cap of 20% on ex-factory price of EVs.