Niti Aayog has proposed that in the next six to eight years, India's entire two-wheeler industry should go full electric. The proposal is aimed to curb pollution and reduce India's dependency on fossil fuels.
A Reuters report states that their sources claim a draft proposal from Niti Aayog has recommended to electrifying the country's popular three-wheeled autorickshaws. The proposal has not been made public as yet and still needs the green-light from the government.
India is the largest two-wheeler market in the world, with more than 21 million bikes and scooters sold in the last financial year when compared to 3.3 million cars and UVs. However, China is the world's largest two-wheeler EV market as a significant proportion of sales contributed by electric two-wheelers when in India they only accounted for a small fraction of sales. However, the demand for them has grown as sales amounted to be more than double from the previous year with 126,000 units of electric scooters sold compared to 54,800 units from the previous fiscal.
If the proposal, which is being worked on with the Ministries of Heavy Industries, Road Transport and Power, is approved, it would open up a new market for global companies like Japan's Yamaha Motor and Suzuki Motor, which are drawing up plans to launch electric two-wheelers in India.
Modi's government set an ambitious target in 2017 to electrify all new cars and utility vehicles by 2030 but resistance from the auto industry forced it to scale back the plan. The government now expects electric vehicles to make up 15% of all new sales in five years from less than 1% currently. Efforts to convince car makers to produce electric vehicles have flopped mainly because there is no clear policy to incentivise local manufacturing and sales, a lack of public charging infrastructure and the high cost of batteries.
The draft proposal goes some way towards rectifying that, offering incentives for the manufacture and sale of electric motorbikes and scooters while penalising gasoline models, said the source, adding that the plan will be finalised after input from industry players. Hero Electric as well as start-ups Ather Energy, Twenty Two Motors and Okinawa currently sell electric scooters in the country. India's cabinet in February approved a scheme to spend $1.4 billion over three years to subsidise sales of electric and hybrid vehicles.