Policy Predictability Essential for Accelerating Electric Mobility in the Two-Wheeler Segment

Ather Energy, a leading electric two-wheeler manufacturer, emphasizes the need for policy predictability to make investment plans for the acceleration of electric mobility in the two-wheeler segment. The company, backed by Hero MotoCorp, aims for 100% electrification of the domestic two-wheeler market by 2030 and is also preparing to export to similar markets in the near future.

With the FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme set to end in March next year, Ather Energy’s Chief Business Officer, Ravneet S Phokela, expresses satisfaction with the current levels of government support and subsidies. However, he hopes that the scheme will be extended for another three to five years to further accelerate electric vehicle (EV) adoption.

Phokela highlights two critical requirements for the next phase of FAME. Firstly, the need to extend the time period of the scheme and secondly, the importance of policy predictability. He stresses that unpredictability can have adverse effects on business, as investment plans are based on certain assumptions of subsidy. If these assumptions change, investments become uncertain.

Ather Energy had planned to establish a third plant with a production capacity of 10 lakh (1 million) units annually, but the location has not been finalized due to the uncertainty surrounding government subsidies. Phokela urges policymakers to provide predictability in subsidy structures to foster investment and growth in the EV sector.

The company acknowledges the current subsidy levels, which amount to approximately Rs 21,400 per vehicle, as sufficient. Phokela argues against increasing subsidies to higher levels, as it could lead to artificial pricing and an unsustainable market. Ather Energy believes in the longevity of subsidy programs rather than a higher subsidy in a single year. The finite amount of money should be spread out over three to four years to ensure sustained support for the industry.

Regarding the electrification of the two-wheeler market, Phokela expresses confidence that by 2030, it will be 100% electrified. However, by 2025, the penetration rate is expected to be around 50-55%. As for export plans, Ather Energy is considering markets similar to India to take its first steps outside the country.

In conclusion, policy predictability is crucial for investment planning and the continued acceleration of electric mobility in the two-wheeler segment. Ather Energy urges policymakers to extend the FAME scheme and provide stable subsidy structures to attract investments and drive the adoption of electric two-wheelers.

Sources: PTI, Devdiscourse