Society of Manufacturers of Electric Vehicles (SMEV) DG Sohinder Gill said the customers do not want e-bikes without the subsidy and therefore, the sales are not picking up.
By Pritish Raj
The department of heavy industries is likely to relax the eligibility criteria for electric two-wheelers for claiming subsidy under the second phase of the FAME II (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) scheme, people familiar with the matter said.
The development comes weeks after electric vehicle (EV) makers said the conditions to claim subsidy under the new scheme are so stringent that barely any two-wheeler would be eligible. Besides, the vehicles have become costlier, owing to a lower subsidy.
As a result, less than 10 vehicles were certified by the government agencies in April. In March, over 5,000 units were sold. The FAME II scheme rolled out from April 1, and is applicable for the next three years. It aims at providing incentives to 10 lakh two-wheelers, 35,000 electric four-wheelers and 20,000 hybrid vehicles. However, industry experts said that if the eligibility criteria is not relaxed then these targets will not be met.
Society of Manufacturers of Electric Vehicles (SMEV) DG Sohinder Gill said the customers do not want e-bikes without the subsidy and therefore, the sales are not picking up. “Currently, the electric two-wheelers that are manufactured do not meet all the conditions required for the incentive,” Gill told FE.
Some of the conditions include minimum acceleration, density of the battery and 50% localisation of content. FE had earlier reported that manufacturers have raised concern over the clauses of the scheme, saying under the latest programme, the vehicles have become costlier as the subsidy is lower compared to FAME I (April 2015-March 2019).
“The government is considering tweaking some of the conditions so that more vehicles come under the ambit of scheme and demand continues to remain intact,” one of the person said. The incentives are meant to drive demand for electric vehicles so that the pollution is curbed, therefore, there is no point sticking to guidelines which fail to realise the objectives of, the person added.
Under the new scheme, the subsidy for e-bikes has been capped at Rs 10,000 for battery strength of 1 kiloWatt, while FAME I offered a flat Rs 20,000 for two-wheelers without any condition for the battery strength. This, manufacturers say, made the same two-wheeler costlier by Rs 10,000 as most of the e-bikes currently have a battery strength of 1 kiloWatt.
As per the latest notification by the department of heavy industries, under the FAME II scheme, two-wheelers will need to have a minimum acceleration of 0.65m/s. Earlier, there were no norms for acceleration.
Besides, the government has mandated 50% localisation of content in the vehicles to avail the benefits under the scheme, which manufacturers said is difficult to maintain as companies have to import several components, in addition to lithium-ion batteries and electric motors used in electric vehicles.