Govt Subsidy: They do not existing in vacuum. Many govt. have made some commitments on international forums to reduce it’s carbon footprint. Read, India’s COP26 commitment. Promoting faster adoption of EVs. is one of the ways to achieve this kind of target. We know that the subsidy can’t exist for eternity, but at the same time a whole gamut of things are inter-related with the subsidy. Our petrol import bill, environment concerns, we becoming self sufficient in this new technology and then export options etc etc…
A new product category often goes through what is called as product adoption curve. Notice the chasm between early adopters and Early majority ? This chasm exists for a reason, because the early majority are pragmatic people who want proof that something really solves a purpose for the price they are paying. But early majority is where the real volumes are. A subsidy by reducing price a bit, encourages some in the early adopter & majority category to try the product.
There are question marks on the FAME II subsidy because of the lack of proper guidelines on how/what will be the process to check that those claiming the subsidy have indeed used 50% locally (by value) sourced components. Govt. has taken some action to streamline this by appointing some external agencies. There was an article yesterday implying Hero Electric and Okinawa have not met those criteria’s. (Hero Electric and Okinawa likely to get recovery notices over FAME-II subsidy: Report – BusinessToday)
On the other hand, some states are taking up the mantle of targeting faster adoption of EVs by offering ZERO MV tax and different other SOPS. Find the details of Odisha govt. initiatives here Odisha enhances subsidy on purchase of electric vehicles Odisha is targeting a 20% EV adoption by 2025.
I feel, at a certain level of adoption by early majority, the debate, if the industry is subsidy dependent will die. Because when subsidy stops, it will be a industry wide event. Each player will be equally impacted. I don’t think the wave of EV adoption will stop just because the bike will be costlier by 15-20%.
Meanwhile great news on Greaves secondary sales numbers in April. It has shot to 2nd position. I have no clue why TVS & Aether nos. (even hero electric) have fallen off the chart. Could it be related to the FAME-II issues ?
OLA ELECTRIC TECHNOLOGIES PVT LTD | April – 21579
AMPERE VEHICLES PRIVATE LIMITED | April – 8815
TVS MOTOR COMPANY LTD | April – 8722
ATHER ENERGY PVT LTD | April – 7681
Mahindra & Mahindra | April – 3690 (includes 4 wheeler??)
Bajaj Auto LTD | April – 3607
HERO ELECTRIC VEHICLES PVT. LTD | April – 3287
OKINAWA AUTOTECH PVT LTD | April – 3127
YC Electric Vehicle | April – 2773
Dilli Electric Auto Pvt. LTD | April – 1717
Okaya EV Pvt Ltd | April – 1508
Piaggio – 1405
Saera Electric Auto Pvt Ltd | April – 1819
kinetic Green Energy | April – 1170
Mini Metro EV | April – 1006
(Listed all the players with higher than 1k vehicle sales in EV in April)
Expecting a bumper set of numbers from Greaves. Lets see if they can cross the 800 cr. revenue mark at consol. level and EBITDA positive at EV level.
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