Electric Two-wheeler Sales In India Take A Sharp Dip

Sales of electric two-wheelers fell up to 94 per cent due to recent policy changes

• Customers chose more affordable scooter instead of expensive ones that comply with FAME-II.
• Only 3,000 EVs took to the road after the adoption of FAME-II. 
• About 49,000 low-speed electric two-wheelers were sold during the first half of 2019.
• Two-wheelers with a minimum speed of 40kmph and a range of 80km qualify for subsidies.

The electric two-wheeler industry, the premium side of the spectrum to be precise, has witnessed a drastic dip in sales over the last six months. Customers opted for cheaper alternatives after the change in policies which led to a 94 per cent fall in sales. 

For a broader perspective, the Government of India launched the FAME subsidy back in 2015 in a bid to promote electric vehicles. It then rolled out the second phase of the plan called FAME-II which incentivised electric two-wheelers based on certain criteria. The eligibility criteria dictated that electric two-wheelers under this scheme should offer a minimum top speed of over 40kmph, 80km per charge and a lithium-ion battery. Not only this, but 50 per cent of the scooter had to be localised in order to receive subsidies. 

The higher expectations pushed manufacturers to invest more money into R&D and set up a local supplier base, which further increased prices of scooters. This essentially took a toll on buyers which led them to drift towards smaller low-speed vehicles equipped with a smaller lithium-ion or lead-acid battery. 

A low-speed electric two-wheeler would cost you anywhere around Rs 55,000 to Rs 60,000, but you'd have to shell out over Rs 75,000 for a high-speed scooter. Consequently, only 3,000 electric two-wheelers took to the roads after FAME-II as opposed to 48,671 units last year via FAME-I. In comparison, about 49,000 low-speed electric two-wheelers were sold during the first half of 2019.  

Re-certification of electric two-wheelers under the new policies are also to be blamed for the fall in sales. Jeetender Sharma, MD of Okinawa Autotech, said, “It is only recently that most other players got products recertified. So sales have been low,” 

Granted customers are currently choosing to go for low speed electric scooter. However, in the long run it’s high speed or premium electric scooters which will prove to be a better bet. The 2019 Union Budget should also offer some relief to customers with reduced GST rates and exemption of certain RV parts. That said, there are a lot of factors that still work against EVs, one of them being a proper infrastructure. Only time will tell how things pan out. Until then, stay tuned to BikeDekho

Source: ET Auto