Companies line up affordable electric bikes post FAME II subsidy hike – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/auto/auto-news/companies-line-up-affordable-electric-bikes-post-fame-ii-subsidy-hike/articleshow/83680638.cmsSynopsis

This comes in the backdrop of the government’s decision to increase subsidy on electric two-wheelers by 50% to ₹15,000 per kWh under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME II) scheme. The scheme came into effect in 2019 to help hasten the transition to electric vehicles to curb air pollution and reduce India’s dependence on oil imports.

A number of electric two-wheelers will soon be available in the sub-₹70,000 price segment, which has traditionally been dominated by the internal combustion engine players, as manufacturers firm up new launches, rejig portfolios and rework product plans.

This comes in the backdrop of the government’s decision to increase subsidy on electric two-wheelers by 50% to ₹15,000 per kWh under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME II) scheme. The scheme came into effect in 2019 to help hasten the transition to electric vehicles to curb air pollution and reduce India’s dependence on oil imports.

Currently, most electric two-wheelers retail between ₹80,000 and ₹1.4 lakh.

While increased subsidy will result in faster adoption of electric two-wheelers, Sohinder Gill, director general of the Society of Manufacturers of Electric Vehicles (SMEV) said the next two-three months will see a temporary dip in sales as manufacturers readjust the product mix and stock up dealer networks with new products as they make significant investments in technology and distribution.

Many manufacturers have already revised prices, making the products more affordable. Ampere Vehicles, the e-mobility business ofGreaves CottonNSE -4.76 %, announced a price cut of up to ₹9,000 on its electric scooters.

“The subsidy revision makes EVs (electric vehicles) affordable and helps strengthen our customer base,” said Roy Kurian, chief operating officer, E-Mobility Business (two and three-wheelers), Ampere Electric.

Okinawa Autotech has reduced the prices of its entire range of electric scooters in the range of ₹7,200-17,800. “Lowering the prices of electric scooters will persuade more riders to switch from a combustion-engine model to an electric one,” said Jeetender Sharma, managing director, Okinawa Autotech.

The company is investing ₹150 crore to set up a new manufacturing facility in Rajasthan near its existing plant.

“It’s a no-brainer to go electric. This is a significant policy move in a decade, with not much difference in the upfront price,” said Tarun Mehta, CEO of Ather Energy.

Cos Line Up Affordable Electric Bikes Post FAME II Subsidy Hike

The company is backed by Flipkart founders Sachin Bansal and Binny Bansal, Hero MotoCorp and Tiger Global, and it plans to expand distribution to 30 cities in the next six months. The Ather 450 plus is priced around Rs 1.3 lakh, close to the Vespa or Aprilia scooter, said Mehta. The increase in subsidy will trigger a 20-30% jump in sales of electric two-wheelers to more than six million units by 2025, he said.

Others like electric two-wheeler manufacturer Revolt Motors reopened bookings for its e-motorcycles. The Rahul Sharma-promoted company managed to close bookings in less than two hours on Friday. It sold ₹50 crore worth of its flagship RV400 bike, which is priced less than Rs 1 lakh.

Experts said the subsidies will increase adoption, encourage research & development and innovation to bring it closer to the target of 30% two-wheeler market becoming electric in five years, up from just 1% at present. In 2020-21, electric two-wheeler sales stood at 140,000 units while two-wheeler sales were 17 million.
India has the potential to become a global EV manufacturing hub, said Ola chairman Bhavish Aggarwal. “Our Ola Future factory will be coming online soon, and will be able to accelerate the global transition to sustainable mobility even faster and price our range of electric scooters aggressively to make it accessible,” he said.

These zero emission vehicles with lower maintenance cost will surely spur a substantial demand for electric two-wheelers, said experts.

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