Last year, the Indian government rolled out a new subsidy model under the phase II of Faster Adoption and Manufacturing of Electric Vehicles (FAME II) to boost sales of high-speed electric two-wheelers. But recent data on sales of electric vehicles (EVs) highlight that the attempt may not have been successful the way the government expected.
Overall, the EV industry has registered a 20% hike with the sale of 1.56 Lakh units. Out of which, electric two-wheelers make up for almost 97% of the sales with 1.52 Lakh units sold. Now, in the electric two-wheeler sections the low-speed e-scooters, which do not come under the FAME II policy, have overtaken the faster e-scooter market overwhelmingly.
According to the Society of Manufacturers of Electric Vehicles (SMEV), low-speed scooters constituted 90% of all the electric two-wheelers sold in the entire financial year. The trend was highlighted in the first half of the financial year 2020. While the sale of high-speed electric two-wheelers crashed by 94% to 3K, the market for low-speed electric two-wheelers remained consistent with 49K units.
Several industry leaders have highlighted that the FAME II policy has been giving the EV industry a hard time. With this policy, the cost of high-speed e-scooters has increased even with the subsidies, forcing customers to opt for less efficient low-cost versions, said SMEV.
Even, Hero Electric has previously said that FAME II policy has jeopardised the mass adoption of EVs. It believes that cost-effective electric vehicles are crucial for the industry’s growth.
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Despite bleak sales of high-speed electric scooters, Bengaluru-based electric two-wheeler startup Ather has decided to keep its focus on the segment. The company believes turning to “low spec end of the market” would not be the right way to grow.
Ravneet Phokela, chief business officer, Ather Energy, added that the low-performance scooters make a significant chunk of sales because there is a lack of alternatives in the market. He added that the market will witness a transition with more brands emerging with their efficient and powerful models.
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James Quinn, CEO of Faradion, said, “We foresee India as our next big priority market, given the electric mobility market is waiting to grow rapidly.”
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