Policy Predictability Crucial for Electric Two-Wheeler Market Growth

In order to accelerate the adoption of electric mobility in the two-wheeler segment, policy predictability is crucial for investment planning, according to Ravneet S Phokela, the chief business officer of electric two-wheeler maker Ather Energy. The company, backed by significant investor Hero MotoCorp, aims to achieve 100% electrification of India’s domestic two-wheeler market by 2030.

As the FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme is set to end in March next year, Phokela expressed satisfaction with the current levels of government support and subsidy. However, he hoped that the subsidy would be extended for another three to five years to further accelerate the adoption of electric vehicles (EVs).

Phokela emphasized the need for policy predictability, stating that unpredictability is detrimental to business planning. If the assumptions regarding subsidies change, it affects the company’s investment plans. Ather Energy had intended to establish a third plant with an annual capacity of one million units, but the lack of policy certainty has caused delay in finalizing a location.

Phokela further emphasized that while they are content with the current subsidy levels, they do not seek higher subsidies as it could distort the market and lead to artificially comfortable price structures. He urged the government to maintain the subsidy structures and make them predictable, enabling businesses like Ather Energy to make informed investment decisions.

Policy stability is essential for the growth of the electric two-wheeler market in India. It provides confidence to manufacturers to ramp up their production capacities and plan for the long term. By extending and providing predictability in policy support, the government can further accelerate the transition to electric mobility and help achieve the desired goal of 100% electrification of the two-wheeler market.

Source: No listed sources