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SMEV wants govt to reconsider incentive cap on EVs

SMEV wants govt to reconsider incentive cap on EVs

New Delhi, Jun 4 (PTI) Electric vehicles (EV) manufacturers body SMEV has asked the Heavy Industries Ministry to reconsider the proposed cap of incentive to 20 per cent of ex-factory price of EVs under FAME II scheme, saying it would adversely affect the two-wheelers segment.

In a letter to Heavy Industries and Public Enterprises Minister Anant Geete, the Society of Manufacturers of Electric Vehicles (SMEV) said if the proposed cap is implemented the cost of mass use electric two-wheelers will shoot up.

"There is a limit of 20 per cent of the ex-factory price on the incentive. This is drastically reducing the incentive on affordable e-two wheelers, making them unaffordable for the common man," said SMEV Director Sohinder Gill in the letter.

It is very clear that two-wheeler customers will not pay much higher than petrol two-wheelers at least for the next few years till the total cost of ownership advantage is clearly established, he added.

Stating that maximum price adoption would happen at prices similar to basic petrol two-wheelers priced between Rs 50,000 and Rs 65,000, Gill said under the proposed FAME II scheme, prices of e-scooter with speed of 50kmph and range of 70 km would be costlier by Rs 9,013 when compared to FAME I (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme.

"Majority of volumes of sales are at these affordable price points and therefore leading to a major reversal of e-mobility," he said in the letter.

When contacted, Gill told PTI, "If the proposal is implemented as it is under FAME II, then many of our members are unlikely to continue to sell electric two-wheelers as they play only in the mass segment."

In fact, many members are now trying to clear stocks by September before the expected implementation of FAME II in October, he added.

Gill further said under FAME I high speed (above 25kmph) electric scooter powered by lithium ion battery received incentive of Rs 22,000 and the SMEV was expecting it would go up further in FAME II for greater mass adoption.

"Unfortunately, the reverse has happened and we are requesting the government to rectify this anomaly cap on incentive to 20 per cent of ex-factory price," he said.

The SMEV also said it was apparent that FAME II favours adoption of high priced e-two-wheelers, which would "lead to a very miniscule volume from the rich customers, depriving the common man the advantage of cleaner and economic electric two-wheelers". PTI RKL MR MR