India may fall short of selling the targeted 1 million electric two-wheelers, says industry body

Only 3 percent of the 1 million electric two-wheelers targeted by the government under an incentive scheme launched in 2019 have been sold so far this year, Society of Manufacturers of Electric Vehicles (SMEV), said.

Phase 2 of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME 2) scheme launched by the government in April 2019 envisaged cumulative sales of 1 million electric two-wheelers by March 2022.

However, by the end of December 2020 only 31,813 electric two-wheelers have been sold since the start of the scheme. In other words, consumers will have to buy 9.68 lakh units in little under 15 months making it a monthly run rate of slightly over 64,500 units.

Sales of high-speed electric two wheelers during the January to December period stood at 25,735, a fall of 5 percent as against 27,224 units sold in 2019, according to the Society of Manufacturers of Electric Vehicles (SMEV).

Sohinder Gill, Director General, SMEV, said in a press statement, “The FAME 2 scheme had some good points and laudable objectives but came with so many strings attached, most of them introduced prematurely or unnecessarily, that lead to the achievement of only 3 percent of the stated targets.”

“The scheme could not attract the customers to shift from the polluting petrol bikes to electric two-wheelers, mainly because the preconditions and qualification criteria of FAME 2 made the bikes unaffordable to the mass market customer despite the subsidy,” release added.

In order to qualify for the FAME 2 benefits an electric two-wheeler needs to have a minimum drive range of 80km, maximum speed of 40 km/hr and an energy consumption of 8 units for a full charge. In addition, localised content in the vehicle should be 75 percent.

To provide a further push to the industry the government announced several measures including allowing two-wheelers to be sold without their batteries in an effort to incentivise development of swappable battery technology. A tax benefit of Rs 1.5 lakh was announced for interest paid on loan taken to buy electric vehicles including electric two-wheelers.

“We have lately seen many positive steps by the central and state government such as the announcement to support battery manufacturing in the country with an outlay of Rs 18,000 crores and allowing the selling of E2W without battery, entry of established players in the market, increase in citizens’ interest in green vehicles, start-ups foraying into the industry with innovative solutions like financing, last-mile delivery, charging etc. and lastly, the government continued support to the aligned industry, perhaps the only vital missing link is a robust, customer-friendly FAME 2 policy,” added Gill.