Hero Electric and Okinawa, which together controlled more than half of India’s high-speed electric two-wheeler market, have not only lost their thrones, but their products are now being sold at a discount, even though the subsidy they carry is set to expire soon due to an industry-wide government crackdown on alleged manufacturing rule violations.
While the government stopped providing FAME-II subsidies to the majority of players after it was revealed that certain players were importing EV batteries and chargers in violation of the FAME-II stipulated norms in March, some dealers of both Hero Electric and Okinawa are still providing these subsidies on their existing stocks.
The government has discontinued subsidizing payments to 8-12 firms, including Hero Electric and Okinawa. The present status of subsidy provision on the FAME portal for each of Hero Electric, Okinawa Autotech and Tunwal E-Motors models stands ‘expired’.
Without these subsidies, the impacted OEMs like Hero Electric and Okinawa will raise their pricing. This would further change the market share structure, benefiting those players who have been approved for the subsidy by the government.
The subsidy is still being provided to Ather Energy, Ola Electric, Bajaj Auto, and TVS Motor Company. Subsidies under the FAME-II plan vary from Rs 17,000 to Rs 55,000 per car, depending on the battery capacity given by the vehicle manufacturer. There are also state-government-provided subsidies.
Despite the Centre’s notification of localization standards, several EV manufacturers allegedly continued to import batteries and chargers, leading to a larger industry investigation.
The growing number of inexplicable fire events prompted the investigation.
Reference- The Financial Express, Business Standard, Economic Times, HT Auto, Autocar India