According to figures cited by the Society of Manufacturers of Electric Vehicles, 1.2 lakh low-speed (LS) e-scooters with top speeds under 25 km/h were sold in FY23.
According to the SMEV, sales of electric two-wheelers in India increased by more than two and a half times to 8,46,976 units in 2022–23 compared to the prior fiscal year.
E-2 Wheelers Sales in India
3,27,900 units of E-2 wheelers (E2W) sold overall in 2021–22
According to figures cited by the SMEV, 1.2 lakh low-speed (LS) e-scooters with top speeds under 25 km/h were sold in FY23.
“The industry supplied 7,26,976 high-speed electric two-wheelers (E2W) with a top speed more than 25 km/h in FY 2023,” it continued.
Low speed e-scooter sales in 2021–2022 totaled 75,457 units, while high speed e-scooter sales totaled 2,52,443 units.
According to SMEV, the E2W adoption rate fell short of the minimal goal established by Niti Aayog and several research organisations in FY23 by more than 25% annually.
The trade group claimed that the withholding of FAME II subsidies due to failure to adhere to the Phased Manufacturing Plan (PMP) rules had a negative effect on sales of E2Ws.
Ironically, the sudden revocation of a total of over Rs 1,200 crore subsidies that had already been passed on to customers by the bulk of OEMs under the pretence of a delay in localization was to blame, the statement stated.
The alleged under-invoicing of OEMs working in the premium end resulted in a further Rs 400 crore of their company operations being crippled due to a severe lack of working capital, according to SMEV.
More Clarity Required on FAME Scheme from the Indian Government
In order to plan their enterprises for the year FY24, 16 companies, or more than 95% of the sector, are awaiting a resolution to the disarray and debacle of the FAME PMP, according to the statement.
“With only 5% adoption in FY23 and the brief objective of 30%, the EV aim of 80% implementation by 2030 appears more like a mirage,” SMEV Director General Sohinder Gill remarked. The PMP qualifying criteria should be extended by two years and aggressively enforced starting on April 23, he added, adding that “all is not gone and what may be able to bring the sector back on track.” The market is anxiously awaiting clarity on the government’s decision to continue the FAME programme, according to SMEV, who also noted that it is a crucial decision that will determine the future of the entire industry.
It was stated that it is essential to extend the FAME programme for at least 3–4 years in order to promote the growth of the EV environment and make it self-sustaining.
The inability of the participants to formulate a long-term strategy is a result of their bewilderment. The growth trajectory will be significantly impacted by any rapid drop in subsidies, which could jeopardise the government’s e-mobility strategy. A significant sector of the market may be completely eliminated, and this will have a detrimental effect, it was added.
One of the main issues in the supply chain, according to the EV industry association, is the lack of sufficient local production capacity for critical parts like batteries and motors.
Because of supply chain delays, it added, “the industry struggled significantly to find high-quality components during COVID.”
The current subsidy system, in which companies pass the subsidy on to the buyer and then reclaim it out of the government after the sale, also needed to be corrected, according to SMEV.
It advised the implementation of a direct subsidy mechanism, which would allow incentives to be given directly to customers by the government and prevent any disparity. “The existing method lacks transparency, which could result in OEMs altering sales to fraudulently recoup the subsidies,” it added.
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