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The Indian government has proposed to electrify most motorbikes and scooters within the next six to eight years. The idea behind it is to to curb pollution, and reduce dependency on fossil fuels, said a source with direct knowledge of the government's plans.
The draft proposal from 'Niti Aayog', which is chaired by Prime Minister Narendra Modi, also recommended electrifying the country's popular three-wheeled auto rickshaws, said the source, who wished to stay anonymous because the proposal is not public, and still needs a go-ahead from the government.
India consumed over 21 million motorcycles and scooters in the year to 31 March, making it one of the world's biggest two-wheeler markets. Only 3.3 million cars and utility vehicles sold in the same time frame.
Electric scooters accounted for just a fraction of the total but sales have more than doubled to 126,000 over the last 12 months, from 54,800 from last year, according to the data and statistics from the Society of Manufacturers of Electric Vehicles.
"We have lagged in electrifying the car segment. India has decided to take the lead in two-wheelers and three-wheelers," said the source.
Exit polls suggest the political alliance led by Prime Minister Modi will win a clear majority in the country's on-going elections, final results will only be announced on Thursday. It was not immediately clear whether the new administration would adopt the electrification proposal.
If the proposal from the Ministries of Heavy Industries, Road Transport and Power, is approved, it would open up a new market for global companies like Yamaha Motor and Suzuki Motor, which are drawing up plans to launch electric two-wheelers in India.
Prime Minister Modi's government set an ambitious target in 2017 to electrify all new cars and utility vehicles by 2030 but resistance from the auto industry has forced it to scale back the plan. The government now expects electric vehicles to make up 15 percent of all new sales in five years.
Efforts to convince car manufacturers to produce electric vehicles have failed because there is no clear policy that gives incentives to local manufacturing and sales, and also because of a lack of public charging infrastructure and the high cost of batteries.
The source said that the draft proposal in question offers incentives to the electric vehicle manufactures and to sales of electric motorbikes and scooters while penalizing gasoline models. He also said that the plan will be finalized after inputs from industry players.
India's cabinet in February approved a scheme called FAME, which is currently in Phase II, to spend $1.4 billion over three years to subsidize sales of electric and hybrid vehicles.
Thoughts About The Proposal To Electrify Two Wheelers Within The Next Eight Years
While the thought is great, we do not see this happening within the next 8 years. The government will feel a lot of resistance from motorcycle manufacturers who are planning premium motorcycle segment launches only. And what happens to the current lot of motorcycles in the market? We have to wait and watch.