Govt crackdown on EV firms sees shift in market shares | The Financial Express

Govt crackdown on EV firms sees shift in market shares

An Okinawa dealer said, “We had a waiting period stretching for months not too long ago. Now everything is available off-the-shelf.”

Govt crackdown on EV firms sees shift in market shares
The present status of subsidy provision on the FAME portal for each of Hero Electric, Okinawa Autotech and Tunwal E-Motors models stands ‘expired’.

Hero Electric and Okinawa, who together controlled more than half of India’s high-speed electric two-wheeler market, have not only lost their crowns but their products are now offered at discounts even as the subsidy they carry threatens to dry up soon following an industry-wide government crackdown on alleged flouting of manufacturing rules.

Hero Electric’s latest market share has more than halved to just 15% while that of Okinawa declined to 17% in a two-year period, as per data generated by the central government-controlled national vehicle registry, VAHAN. From 53% in 2020, the combined share of both the players stood at 32% in 2022.

While the government stopped giving FAME-2 subsidies to a majority of players post March after it was revealed that certain players were importing EV batteries and chargers, contravening the FAME-2 stipulated norms, some dealers of both Hero Electric and Okinawa are providing these subsidies on their existing stocks.

Hero Electric and Okinawa are among the 8-12 companies whose subsidy disbursals have been halted by the government. The present status of subsidy provision on the FAME portal for each of Hero Electric, Okinawa Autotech and Tunwal E-Motors models stands ‘expired’.

Depending on battery capacities offered by the vehicle maker, the subsidies under the FAME-2 scheme range between Rs 17,000 to Rs 55,000 per vehicle. There are additional state-government provided subsidies too. Hero Electric did not reply to queries at the time of printing this article while Okinawa said it will not be able to provide comments.

Without these subsidies, the prices will be revised upwards by the affected OEMs. This will further alter the market share structure, benefitting those players who have been cleared by the government to receive the subsidy. Ather Energy, Ola Electric, Bajaj Auto and TVS Motor Company continue to get the subsidy.

“We are providing subsidies only on the existing stock. When these get exhausted, there will be no subsidy on the new stock. We are also providing an additional discount of up to Rs 4,500 which is jointly sponsored by us and the company,” said a Hero Electric dealer.

An Okinawa dealer said, “We had a waiting period stretching for months not too long ago. Now everything is available off-the-shelf.”

Also Read: Powered by EVs, Tata motors on for No. 2 spot

The Centre is conducting repeated audits of the electric two-wheeler firms and reporting the results back to the government. These audits check for sales invoices of components to determine their place of origin. The companies, however, are not kept in the loop about the results.

“Affected companies are on the verge of collapsing financially. The government is asking for DVA (domestic value addition) data for their background check. This should have been done two years ago. The co-ordination and communication should have been better,” said a founder of an EV company while choosing to remain anonymous.

Despite the Centre notifying rules regarding localisation, some EV producers alleged to have continued to import batteries and chargers which subsequently led to the broader scrutiny of the industry. The scrutiny was also triggered by the increased cases of unexplained fire incidents.

“Some companies have been importing batteries and chargers which is a direct violation of the FAME rules. And they have been doing it for almost 2 years. How can these companies not find localised solutions for batteries and chargers for two years? From Day 1 the government has been very clear about batteries and chargers,” said another senior executive of an EV maker.

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First published on: 05-12-2022 at 05:00:00 am
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