The central government cut the amount of subsidies for electric two-wheelers from Rs 15,000 per Kwh to Rs 10,000 per Kwh in June of last year.
Chandigarh: Tarun Mehta, the CEO and co-founder of Ather Energy, stated on Friday that the removal of the government's incentive for the sale of electric two-wheelers in April will force entrepreneurs to put in a lot of work, which would lead to one or two more years of growth stagnation. The sector is no longer totally dependent on subsidies to survive, but an early termination of the program in April would force participants to make hard labor and budget cuts.
"The industry would be further pushed away from its targets if this scenario were to occur, even with its resilience," the CEO of the electric two-wheeler company stated in a statement.
Incentives for the sale of two-, three-, and four-wheelers are offered by the national government through the FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) program, which runs until March of this year.
The national government previously cut the amount of subsidies for electric two-wheelers from Rs 15,000 per Kwh to Rs 10,000 per Kwh in June of last year.
Additionally, it lowered the maximum subsidy ceiling from 40% of the vehicle's ex-factory price to 15%.
Mehta highlighted the "repercussions of a sudden subsidy reduction" and stated that the 2023 expansion of the electric two-wheeler sector was disrupted by one year.
"We had the same volume at the end of calendar 2023 that we had at the start. We would have treble it if everything had gone as planned. Thus, the growth decelerated," he continued.
Mehta discussed the sales of electric two-wheelers in Chandigarh, stating that the city is leading the way in the adoption of EVs and that the lack of the FAME plan may have an effect on the current trend.
He went on to say that the program is essential in encouraging the use of EVs and hybrids throughout India, which lowers pollution and lessens dependency on fossil fuels.
The firm statement claims that one of the primary reasons why electric two-wheelers are still widely used in India is affordability. Electric vehicles have typically been more expensive than other vehicles on the market due to factors like high battery costs and limited supply of certain components.
According to the statement, the FAME scheme was crucial in helping to mitigate these issues by offering incentives that increased the affordability of electric transportation for customers.