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With FAME harder to come by, electric 2-wheeler sales crash

With FAME harder to come by, electric 2-wheeler sales crash

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Sales fall 94% in first half of FY20 as policy changes lead buyers to opt for more affordable models. Only electric 2-wheelers with maximum speed of 40 kmph and a range of 80 km per charge qualify for subsidies.

New Delhi : Electric two-wheeler sales under a government incentive programme crashed by 94% in the first six months of FY20 after policy changes led customers to opt for more affordable models. About 3,000 electric two-wheelers were sold through phase-II of Faster Adoption and Manufacturing of Electric Vehicles (FAME) initiative from April to September, a decline from 48,671 units in the year-ago period, according to Society of Manufacturers of Electric Vehicles (SMEV).

“Sale of electric two-wheelers under FAME-II have fallen drastically,” said SMEV director general Sohinder Gill.

“Not only have subsidies come down under FAME-II, the products on which these incentives are being offered are costlier, making buyers opt for more affordable low-speed vehicles.”

About 49,000 low-speed electric two wheelers were sold during the six-month period, according to industry estimates.

These are strapped with smaller lithiumion batteries and have lower acquisition and replacement costs, making them ineligible for FAME-II subsidies and benefits.

Only electric 2-wheelers with maximum speed of 40 kmph and a range of 80 km per charge qualify for subsidies. These criteria necessitated a bigger battery, increasing the purchase price.

A low-speed electric two-wheeler is available for Rs 55,000-60,000, while a high-speed vehicle costs over Rs 75,000.

The battery replacement cost of highspeed electric two-wheelers after four years of use is double, at Rs 40,000-45,000.

“If government had continued to incentivise low-speed lithium-ion electric two-wheelers under FAME-II, these products would have been available for Rs 38,000-40,000,” Gill said.

Another reason for poor sales under FAME-II were norms needing re-certification of vehicles to avail of incentives.

“It is only recently that most other players got products re-certified. So, sales have been low,” said Jeetender Sharma, MD of Okinawa Autotech.

Source : economictimes
Anand Gupta Editor - EQ Int'l Media Network

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