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Finance & Markets

Electric two-Wheeler sale grossly underperform under India’s Fame II policy

The sales of electric two-wheeler in India have remained dim in spite of the push from the Modi Government. The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme meant to boost manufacturing of electric and hybrid vehicle technology has not helped to shore up the E2W industry. The sales of high-speed electric two-wheeler between January to December 2020 period clocked just 25,735 as against 27,224 units sold in the previous year. The government had set an ambitious target of generating a sale of 1 million units under FAME Phase II.

FAME Phase II was launched in April 2019 and with a plan to put at least 1 million high-speed electric two-wheeler on the road by March 2022. The actual cumulative sale since Jan 2019 has been 52,959, however sale under the scheme has remained only 31813 units. 

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The Society of Manufacturers of Electric Vehicles (SMEV) has blamed the government for the lack in policy formulation. “The FAME 2 scheme had some good points and laudable objectives but came with so many strings attached, most of them introduced prematurely or unnecessarily, that lead to the achievement of only 4% of the stated targets. The scheme could not attract the customers to shift from the polluting petrol bikes to electric two-wheeler, mainly because the preconditions and qualification criteria of FAME 2 made the bikes unaffordable to the mass market customer despite the subsidy,” said  Sohinder Gill, Director General, SMEV.

Gill also said that if the government removes ‘the needless handicaps’, the adoption can grow exponentially in a short time. “We urge the government to come up with corrective measures that would help the industry achieve the envisaged target of 10 lakh electric two-wheelers,” he said.

“We have lately seen many positive steps by the central and state government such as the announcement to support battery manufacturing in the country with an outlay of Rs 18,000 crores and allowing the selling of E2W without battery, entry of established players in the market, increase in citizens’ interest in green vehicles, start-ups foraying into the industry with innovative solutions like financing, last-mile delivery, charging etc. And lastly, the government continued support to the aligned industry, perhaps the only vital missing link is a robust, customer-friendly FAME 2 policy,” he added.

Written By

Frontier India News Network

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