Electric scooter, motorcycle dealers shutting down due to low sales

The new rules for FAME II scheme has unintentionally put a stop to several electric two wheelers.

Revolt electric
Revolt electric motorcycle launch next month. Image for reference.

Even as the Indian government is putting its entire weight on creating electric vehicle ecosystem, the existing electric two wheelers are facing a tough situation, so much so that around 20% of them exited the business in a span of a year. According to a recent report by Autocar Professional, as of April 2019, there were 860 electric two wheeler dealerships across the country. This figure is significantly less than what it was a year earlier.

It is ironic that the FAME-II policy which is aimed at improving the acceptability of electric vehicles, is the primary reason for most of these dealerships going out of business. Under the FAME-II scheme, the Indian government laid out new regulations regarding the battery type, range and top-speed for the products to be able to eligible for subsidy.

The change in norms meant most of the electric two wheeler OEMs were caught off-guard and had to make technical changes (develop entire two sub-systems in several cases) in order to take advantage of the FAME II scheme. The updated products then need to undergo certification process at ARAI (Automotive Research Association of India) and iCAT (International Center for Automotive Technology).

Ather dealer
Ather on the other hand is on an expansion mode. Launch in Chennai this month.

So, though the FAME-II scheme is good for the industry in the medium and long term, it unintentionally created a short term hurdle for most OEMs and dealers. In some cases, the work on upgrading the products is still on and the business has come to a grinding halt, thereby forcing the dealers to shut shop.

Moreoever, the lack of adequate charging infrastructure and EV awareness, continues to be huge hurdles for the electric two wheeler dealers and companies. However, if at all there is a point in the Indian automotive industry where the number of EV dealerships needs to increase, it is now. So, it is a sort of viscous cycle which needs to be broken if EVs are to move forward.

Meanwhile, the government is mulling over a comprehensive electrification drive which could see all sub-150 cc two wheelers replaced by fully electric ones in the coming years. While major industry stakeholders like Bajaj and TVS are skeptical about such a move, they are also actively working on electric two wheeler platforms.

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