Automobile

Electric two-wheeler subsidy cut has many doomy messages: falling sales is just one of them

By Eduardo Saverin

File photos.

Synopsis

For the flagship models of Ola Electric, TVS Motor, and Ather Energy, government subsidies have been slashed between INR29,000 and INR37,000 per vehicle. Going forward, manufacturers can reduce costs through localisation and reengineering. There could be further market share consolidation among the top five players, and companies with weak balance sheet might shrink their operations or shut shop altogether.

June 2021 was an important month for India’s electric two-wheeler industry. As the government hiked subsidies by 50%, electric two-wheeler sales surged from 4,669 units to 26,136 units in December 2021, a jump of 460%.But now life has come full circle for the electric two-wheeler manufacturers. For, the government has decided to slash subsidies provided under the FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme

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Eduardo Saverin