The Society of Manufacturers of Electric Vehicles (SMEV) has urged the government to consider doing away with the 50 per cent localisation condition for availing electric vehicle (EV) incentives.
It has written to the Department of Heavy Industries, NITI Aayog, Department for Promotion of Industry and Industrial Trade and Ministry for Road Transport and Highways requesting and recommending proposals pertaining to minimum conditions for claiming electric two-wheeler incentives under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) II scheme.
However, some manufacturers are not complaining about the localisation part. “Everybody has their own agenda. Mahindra is very happy with the localisation part because they have such infrastructure for the last five years,” an industry expert said. He said the localisation of components in the country is still a far cry. “Right now in India, no one is manufacturing controllers, battery cells, permanent magnet motors, and this makes up to almost 50 per cent of the vehicle,” the industry expert said.
Revised subsidy
Meanwhile, the SMEV has also said that the revised subsidy under FAME II is inadequate. FAME I had a subsidy of ₹22,000 on an electric bike, while that has been reduced to between ₹12,000 and ₹18,000 for 90 per cent of the two-wheelers operating at city speeds (40 kmph), the letter, accessed by
Under FAME II, subsidy is linked to the battery capacity and size and stands at ₹10,000 for every kilo-watt hour. SMEV claimed that this subsidy is ‘grossly inadequate’. The 20 per cent cap on subsidy based on ex-showroom price of the vehicle is another aspect that the SMEV has recommended against, as owing to this cap, bikes with larger battery packs will still be limited to a subsidy based on the ex-showroom price.
“Just to match this 20 per cent cap, manufacturers hike their ex-showroom prices. If anyone is using a two kilo-watt hour battery pack, they will not be able to get a ₹20,000 subsidy if they are not pricing their vehicle at ₹1 lakh,” the expert said.
The SMEV has also recommended that the minimum range for eligibility under FAME II be reduced to 60 km from the current 80 km. “This (80 km range) unnecessarily adds more batteries that are not required by 90 per cent of the users,” the letter said.
The sweet price for electric two-wheelers in India ranges from ₹55,000 to ₹65,000. For instance, Hero was selling very good numbers last year, under FAME-I.