Companies

Okinawa not deterred by strict rules for FAME-II incentives

Nandana James Mumbai | Updated on May 06, 2019 Published on May 06, 2019

Jeetender Sharma, Founder and Managing Director, Okinawa Autotech Pvt Ltd

Targeting No 1 slot in electric 2-wheeler market, says MD Jeetender Sharma

Gurugram-based electric two-wheeler maker Okinawa plans to launch a motorcycle and scooter this year which would be FAME II-compliant.

The company is hoping to shift from having an 80 per cent lead-acid battery-based product line-up to 70 per cent lithium-ion battery-based product line-up this year.

By FY21, it plans to make all its products lithium-ion battery-based.

Market share, expansion

The company has recently announced its eligibility to receive incentives under the government’s FAME-II scheme for its two models.

Okinawa’s market share was around 30-40 per cent last year in electric two-wheelers and this year the target is to become No 1, Jeetender Sharma, Founder and Managing Director, Okinawa Autotech Pvt Ltd, told BusinessLine. The company has 300 dealerships across the country and is targeting a revenue of ₹500 crore this year, up from around ₹200 crore last year.

On March 28, the Ministry of Heavy Industry and Public Enterprise issued a notification laying out the eligibility criteria to avail of FAME-II incentives.

This second phase of the FAME scheme has an outlay of ₹10,000 crore, up from ₹895 crore of FAME-I (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles.

Stringent norms

“Electric vehicle makers have been caught off-guard by the stringent eligibility criteria leaving them no time to conform,” CRISIL had stated in a report.

It had also pointed out how the requirement of 50 per cent localisation in manufacturing is expected to be a hurdle for many OEMs.

“And going ahead, upgrade of products and localisation would increase the costs for e-scooters, which could hurt demand,” it had said.

At a time when the FAME-II scheme is being criticised for its stricter norms, Sharma said he doesn’t find the eligibility criteria stringent for the models — which received the regulatory approvals — as they were meeting the requirements of speed, acceleration and range.

The company has been working on these regulations even before the FAME-II incentives, he said.

Cost constraints

When asked about the the concern of cost constraint flagged by the industry for upgrades, he said from Okinawa’s perspective it has not become expensive.

Sharma said the conditions of a minimum range of 80 km per charge and a minimum top speed of 40 kph are not upgrades, but “normal requirements” which did not increase the cost.

He also drew attention to how the EV market in India is not so mature even now, largely due to people’s apprehensions about the performance — especially in terms of the range and the speed of the EVs — compared to petrol-based vehicles.

The government’s efforts with the FAME incentives will help change this and enable consumers to make the shift from petrol to electric vehicles, said Sharma.

Better quality

FAME-II makes the consumers confident about the quality of the products in terms of quality, cost and delivery (after-sale services), he said.

The localisation criteria also helps in having a better control over the quality of the parts, he added.

For its two models, Okinawa Ridge+ and i-Praise, the subsidy will be between ₹17,000 and ₹26,000 based on KWH.

He also sees the demand traction post the FAME-II compliance picking up, as he said it increases the consumer’s confidence in electric vehicles.

Published on May 06, 2019
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