Electric Two Wheeler Segment Loses 20 Percent Of Its Dealers — Is The Government To Blame?

India has big plans to go fully electric in the two-wheeler (up to 150cc) segment over the next six years. If that happens, suppliers will get the opportunity to localise EV related components, and dealers will get all the footfall they need.

*Images Used Are For Representational Purposes Only

According to Autocar Professional, this is tough at the moment. It is a massive challenge because of which many EV dealers have shut operations. There are roughly 860 electric two-wheeler dealerships in the country. This figure stood at about 1075 during last year. That's about 215 dealers shutting shop.

Major hurdles for dealers have been a lack of EV charging infrastructure, and minimal or no finance options. Both these reason have also lead to customers staying away from the electric vehicle market. Adding to the growing woes of the dealers are the challenges that the FAME II scheme laid down for manufacturers, wherein 50 per cent of the product has to be localised if they want to qualify for the incentives.

While the intent of the scheme is right, it created an unintended disruption in the market. All electric vehicle models have undergo technical changes, and work on some may still be in progress, before getting certified by the Automotive Research Association of India (ARAI) and International Centre for Automotive Technology (iCAT).

Sohinder Gill, Director, Society of Manufacturers of Electric Vehicles (SMEV), said, "This process itself generally means two to two-and-a-half months. Then, there will be few manufacturers who were earlier supplying."

"There were 26 or 30 models and obviously every model has to be certified but this also means a long waiting line. That, perhaps, the policy maker did not realise that they are going to almost stop the business for two months," he added.

This is not the first time that the electric two-wheeler industry has faced a disruption. There was a fallout about six years ago, after the Ministry of New and Renewable Energy withdrew it's incentive schemes.

Mr Gill, who is also Hero Electric's Global CEO said, "Not once not twice but thrice in the last 10, maybe 12 years, and in one point of time, we (Hero Electric) were the only ones standing in that whole crowd while everybody had almost left."

That could explain why Hero Electric is the current market leader, in a market that is struggling to grow. With more players coming in to the segment, and with the increasing buzz around electric mobility, OEMs are hoping that more dealers to join the bandwagon, and enjoy a better ride while plugging into electric mobility.

Thoughts About Dealers Slowly Exiting The EV Segment

This was bound to happen. The government has it's own thing going on and no one from the industry seems to be represented at the Office. If the government continues to change plans every so often, manufacturers will be unable to deliver on time, and dealers will have no other choice than to cut loses and walk away. The Indian government needs to really study the industry, listen to its leaders, and come up with a plan that works for every one, from manufactures to consumer, and every on in between.

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Read more on: #green vehicles
Article Published On: Wednesday, July 3, 2019, 18:02 [IST]
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