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EV Policy Requires “Course Correction” To Sell More EVs, Says Hero Electric

“Something is not working with the current policy, Sales are just around 60,000 units. It should have been six lakh plus by now” says Naveen Munjal, Managing director of Hero Electric.

Hero Electric is targeting 5 lakh-7 lakh EVs by 2025: Naveen Munjal

Image Credits- Fortune India

The FAME II scheme with an outlay of Rs.10,000 was implemented in the early match, to encourage two-wheeler electric vehicle usage. The scheme allows the 10 Lakh registered vehicles to avail Rs.20,000 incentive for each vehicle.

Scheme modification need

According to what the directing manager told,

“We are now two years down in the policy and there is only one year to go. But if you look at the number of vehicles which have benefitted, it is just around 60,000 units. It should have been six lakh plus by now. So something is not working. So that is where the policy now needs to be kind of rejigged,”

Interestingly, the scheme allows only high-speed bikes to be registered. Thus, it contradicting the purpose of initiating the scheme to encourage the use of electric vehicles.

Companies like BYD in China, are making efforts to produce a cheaper electric vehicle with lower ranges and speed. Manufacturing advanced electric two-wheelers with low cost to make them available to middle and low-income families is much needed for the current economy.

How to improvise the scheme

In addition to electric two-wheelers, the scheme also supports e-buses and their primary focus is on public transportation. As the scheme says, the incentives for buses is 40% and for other electric vehicles is 20%.

On a further note, Naveen Munjal said,

“It is like when we launch any new product or new publication etc where you are constantly observing if the goals are being met. If it’s not, then we do some course correction. So like that this policy needs a course correction as well because it is not working in the way it should have.”

According to Munjal, the policy has too many parameters. There is a need for more modification and it needs to be done fast. The first FAME scheme was initiated in 2015, and the revised FAME II was in 2019. As companies look at the sales and immediately improvise, the government policy also needs to improvise as the usage of electric vehicles doesn’t increase with the current scheme.

While talking about the parameters involved, Naveen Munjal said as follows.

“There are too many parameters that they have put in regarding speed, range, etc..that is not the right way. What should be happening is that they should front-load the subsidies. If the target is to convert a certain number of two-wheelers with internal combustion engines to electric, there has to be front-loading of subsidies.”

The advantage of the scheme is, both hybrid and electric versions are considered. Unlike European’s policy which is shifting to fully electric currently. India is still in transition mode, and having a hybrid model, as more charging stations are yet to come has bought a lot of options for buyers.

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