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Last updated: 07 May, 2020  

Electric.Car.9.Thmb.jpg Auto sector for extension of FAME II scheme
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SME Times News Bureau | 07 May, 2020

A large number of factors may impact the demand for the Electric Vehicles (EVs) for next two to three years in a significant way and would require continued support from the government to create consumer preference towards EVs.

This was highlighted in FICCI's Electric Vehicle Committee on 30 April 2020 under the Chairmanship of Mr Shekar Viswanathan, Vice Chairman & Whole Time Director, Toyota Kirloskar Motors, and Co-chairmanship of Ms Sulajja Firodia Motwani, Founder and CEO of Kinetic Green.

The impact of COVID-19 could make consumers more risk averse to new technologies and higher priced vehicles, such as EVs, noted FICCI EV Committee.

Further, the downward trend in fuel prices would negatively affect the cost-benefit of EVs in the medium term. Adverse impact of supply chain disruptions is also more likely on EVs than the ICE vehicles mainly because the supply chain for EVs in India is beginning to get established, vis-a-vis a long established supply chain for ICE vehicles.

However, propensity of change in consumer behaviour may not be the same across all segments of EVs, certain segments like two wheelers and three wheelers may not be impacted in the long term.

E-Bus segment will be affected as STUs (State Transport Undertaking) may not have sufficient funds for the procurement. Additionally, factors like fall in diesel prices and concern of fund availability will further impact the demand for EV buses and this may encourage STUs to buy ICE (diesel) technology buses.

To sustain the efforts made towards electrification and to attract investment, adopting technology agnostic approach would be an appropriate pathway to achieve India's EV targets.

Shekar Viswanathan, Vice Chairman & Whole Time Director, Toyota Kirloskar Motors and Chairman, FICCI Electric Vehicle Committee said, "In the recent past, the overall auto sector hasn't been performing well and the current COVID 19 outbreak has further exacerbated the situation. Electric mobility, which is in the nascent stage, is also not insulated from this impact.”

To understand the ground realities, FICCI arranged for inputs from its members for feasible recommendation to the government to ensure sustainability of EV offtake in the Country as well as possible measures to attract investment for EV parts manufacturing specially in the wake of global development. We received many useful suggestions which FICCI will be recommending to Government for their consideration, he added.

Describing the situation as a testing time for the EV industry, Sulajja Firodia Motwani, Founder and CEO of Kinetic Green, and Co-chair of FICCI EV Committee said, " We will be recommending extension of FAME II scheme by at least one year to 2023."

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