TOI : Expiry of cash subsidy scheme on electric vehicles before the launch of the national action plan has resulted in 75% drop in sales of electric vehicles since April 2012, said industry players. They now demand extension of subsidy scheme till the announcement of the policy.
"Sales of our bikes are down by 75% in the current fiscal. We have footfalls but they are not getting converted into sales, as consumers find that the subsidy is no longer available," said Avinash Bhandari, joint MD of Electrotherm, the Ahmedabad-based manufacturer of Yo bykes.
The company's sales of bikes doubled to nearly 80,000 in 2011-12 compared to the previous fiscal. It had sold 15,000 bikes in the first quarter of the previous fiscal. The company claims to have 25% share in the electric two-wheeler industry.
Sohinder Gill, director of the Society of Manufacturers of Electric Vehicles, claims that withdrawal of subsidy has resulted in 'not a single electric car sold in April and May'. He claims that plummeting of sales by more than 50% has made business unviable for dealers.
"Close to 33% of the dealers are reverting to their earlier business and around 20% have put down shutters. It is difficult to convince them for persisting in the business. Rental and other operating expenses are high," Gill told ET. The union Ministry of New and Renewable Energy (MNRE) provided a cash subsidy of Rs 4,000-5,000 on electric two wheeler and of Rs one lakh on electric cars. The subsidy scheme ended on March 31, 2012.
The subsidy is available to the indigenous manufacturers of electric vehicles, registered with MNRE and then passed on the consumers. Electrotherm, Hero Electric and BSA Electric are amongst the 12 manufacturers of electric two-wheelers. The rest are regional players. Mahindra Reva is the only electric car manufacturer registered with MNRE.
The scheme was to be replaced by National Electric Mobility Plan of the Ministry of Heavy Industries (MoHI) of the Union government, aimed at creating an ecosystem for promotion of electric and hybrid vehicles in the country. Already in an advance stage of discussion, the plan has components like cash subsidy and financing facilities for the end consumers, creating a network for charging of the vehicles, research and development as well as (R&D) incentives for the companies amongst others.
R Chandramouli, COO, Mahindra Reva, the manufacturer of India's first electric car 'Reva', feels that the cash subsidy in India is very less compared to other countries and hopes that this aspect is catered to in the National Electric Mobility Action Plan. "The US government gives a subsidy of $7,500 per vehicle. In China, the national government gives a subsidy of $8,000 and in European countries it is 3,000 euros," he told ET.
Industry fear that the time gap between the expiry of the subsidy scheme and launch of the national action plan is impacting the industry as the skilled workforce created over years is migrating to other sectors for want of work. "We have a manpower of 2,000 people. But they are moving to other jobs. It will be difficult to bring them again if corrective measures are not taken," said Gill, who is also the CEO of Hero Electric.
