Electric Vehicles segment faces a slump as subsidy revoked
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Sales of Electric Vehicles (EVs) have dipped by 75 per cent since April 2012 as the cash subsidy scheme on electric vehicles was revoked prior to the implementation of the national action plan. Industry experts are now demanding an extension of the subsidy scheme until the policy is announced.
Joint Managing Director, Electrotherm, Ahmedabad, the manufacturer of YObykes, Avinash Bhandari, said, "Sales of our bikes are down by 75 per cent in the current fiscal. We have footfalls but they are not getting converted into sales, as consumers find that the subsidy is no longer available.”
According to Director, Society of Manufacturers of Electriv Vehilces (SMEV), Sohinder Gill, not a single electric car was sold in April and May 2012 due to the withdrawal of the subsidy. He said that the dealers do not find the segment lucrative any more due to more than 50 per cent decline in the sales volume. Gill stated, "Close to 33 per cent of the dealers are reverting to their earlier business and around 20 per cent have put down shutters. It is difficult to convince them for persisting in the business. Rental and other operating expenses are high."
The subsidy scheme which expired on March 31, 2012 was provided by the Union Ministry of New and Renewable Energy (MNRE). It involved a cash subsidy of Rs. 4,000-5,000 on electric two wheelers and of Rs. 1 lac on electric cars. The local electric vehicle manufacturers registered with MNRE can avail the subsidy and pass it on to the customers. There are 12 manufacturers of electric two wheelers, including Electrotherm, Hero Electric and BSA Electric, though there are regional companies too. Mahindra Reva is the only manufacturer registered with MNRE which produces electric cars.
According to Chief Operating Officer (COO), Mahindra Reva, R. Chandramouli, the cash subsidy is very less in India compared to other countries. He is optimistic that the National Electric Mobility Action Plan, which is bound to replace MNRE's scheme, can resolve this issue. He said, "The US government gives a subsidy of $7,500 per vehicle. In China, the national government gives a subsidy of $8,000 and in European countries it is 3,000 Euros."
However, the industry is concerned as the trained workforce accumulated over the years is shifting to other sectors. It blames this migration on the time gap between the expiry of the subsidy scheme and launch of the national action plan. Gill, who is also Chief Executive Officer (CEO) of Hero Electric, said, "We have manpower of 2,000 people. But they are moving to other jobs. It will be difficult to bring them again if corrective measures are not taken."
The subsidy should have remained in place till the time the new plan comes to force. Or the govt should ensure that any later subsidy or schemes should pass on benefits to current purchases. One can't just let a subsidy expire and not do anything about it. The future of the environment depends on this!!!June 27 , 2012 by Amar
When govt is continue to provide subsidy on diesel then it should continue on electric scooty also.June 22 , 2012 by Col RK
who is bothered about environment or country. this is the sad state of affairs where we are today. will things change some day ?June 19 , 2012 by Mini
Dont understand the reason for removing the subsidy. The government has not done a great favor for the general public by giving Rs. 4,000/- to Rs.5,000/- on 2 wheelers and Rs. 100,000/- on cars. This does not even amount to the daily spending of a daily fuel cost of a normal government official. The additional tax on diesel being cancelled and subsidy on electric being revoked clearly shows how foolish the decision makers are and the state of this nation. This is shameless act, instead of promoting electric and solar engerized vehicles the government and law makers are striving for fossil driven fuel which is excpensive, environment damaging and just of no use to any agencies and people in this country.June 19 , 2012 by Praveen Eshwar
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