Lack of subsidy and delay in implementation of the electric mobility policy has continued to impact the sales of electric vehicles (EV).
According to industry estimates, sales of EVs have almost halved in calender year (CY) 2014 compared with last year. The industry is expected to close this year with sales of around 24,000 units, including two-wheelers and four-wheelers (excluding e-rickshaws), compared with 43,000 units sold in 2013.
In March 2012, the previous UPA government withdrew the subsidy on EVs, which had helped in boosting the industry sales. During the time of subsidy, the industry had reached its peak of 110,000 units, which were reduced to 43,000 units in 2013.
National Electric Mobility Mission Plan (NEMMP), which talks about the government subsidies and investments on creating the required infrastructure was approved by the former Prime Minister Mamnohan Singh in 2012. However, despite several representations made by the industry, the implementation of the policy is still due.
According to S Gill, CEO Hero Eco and director of the Society of Manufacturers of Electric Vehicles (SMEV), delay in the implementation and lack of any subsidy has made sustenance difficult for the EV players.
"Out of the 22 members at one point of time, only seven members are part of the industry body today and 800 dealers have closed down. The industry is on the ventilator, while many have extinguished," said Gill.
According to industry players, the new government has been optimistic about the implementation of the policy. As per the talks held with the government officials before Diwali, the industry players were asked to ramp up capacities. "Some of them actually started stocking up, however nothing happened after that," said an industry source.
The trade body recently met the government officials and were assured that the phase one of the NEMMP will be implemented shortly, in 3-4 months. Though it is not expected to be part of the upcoming Union Budget.
Meanwhile, in order to sustain, the existing players are looking at alternate options like exploring international markets or getting into completely different product line. Companies like Reva – the only four-wheeler manufacturer in this category-- have been expanding in international markets, while Hero Eco has increased its presence in 36 countries.
"Few manufacturers have already started planning and designing of e-rickshaws," said a source. Currently majority of such vehicles are being imported from China.
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