The ambitious task of supplying 100,000 electric three-wheelers by state-owned Convergence Energy Services (CESL) will finally hit the market later this month after witnessing some crucial changes to the entire process and a delay of several months.
Change in shareholding structure
Instead of CESL buying the electric three-wheelers directly from manufacturers and selling them to the customer, complete with the Centre-funded subsidy under the Faster Adoption and Manufacturing or Electric Vehicles (FAME) scheme, it will now act as a facilitator between the customer and financier, a top official of CESL said.
The entire buying process of electric three-wheelers which started in August last year, underwent modifications following changes with the shareholding structure at CESL.
Speaking to BusinessLine, Mahua Acharya, Managing Director, CESL said, “We ran this big tender for 100,000 electric three-wheelers and for which we generated a lot of demand. We have communicated to the OEMs about a delay in lifting that demand because CESL’s shareholding changed. The demand was bankable and we managed to get somebody else to do the financing and we will make an announcement on this in 2-3 weeks.”
‘Objective is to sell cheaper’
Despite the change, however, Acharya added that CESL’s objective of delivering the vehicles at a cheaper price to the customer remains unchanged. As per estimates each of these electric three-wheelers cost in the range of ₹300,000- ₹325,000, taking the entire value of the 100,000 units to Rs 3,000 crore to Rs 3,250 crore.
“We are not doing the financing but somebody else will. We would like to get these vehicles deployed to the market. Our objective is to deliver the vehicles using our sticker price which is 25 per cent cheaper than the market,” Acharya added.
In November last year, Mahindra Electric Mobility, TVS Motor Company, Kinetic Green, Etrio, Mali and Keto Motors emerged as the lowest bidders for the CESL tender. Each of the companies matched the lowest price bid (L1) of ₹306,691, which was about 20 per cent lower than the then prevailing price of the vehicle. A total of 21 companies had applied for the tender.
The continuous increase in price of petrol and diesel pushed the demand for electric three-wheelers significantly last year. According to the Federation of Automobile Dealers Association (FADA), electric three-wheeler volumes jumped more than two fold to 1,77,874 units during FY22 compared to 88,391 units sold in FY21.
The Centre has set a target of achieving 30 per cent electric vehicle penetration in three-wheelers by 2030. India’s current market of electric three-wheelers comprises low-cost and low-speed, many of which are assembled using cheap imports from China, made by manufacturers from the unregulated market.