As the FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) initiative nears its conclusion in March next year, Ravneet S Phokela, Chief Business Officer at Ather Energy, expressed contentment with the current government support and subsidy levels. However, he hopes for an extension of the scheme for another three to five years to expedite EV adoption. In an interview with PTI, Phokela stressed the importance of policy predictability for investment planning in the electric two-wheeler sector.
He emphasized two key requirements for FAME III: an extension of the subsidy period and, more crucially, policy predictability. Phokela explained that unpredictability is detrimental to business because it disrupts investment plans built on subsidy assumptions. Ather Energy had plans for a third plant with a capacity of one million units annually but has not yet finalized the location. Phokela urged for stable policies, stating that businesses need predictability to make investments.
Regarding subsidies, he expressed contentment with the current levels (approximately Rs 21,400 per vehicle) and advocated against raising subsidies to unnatural levels, as it could artificially impact market pricing. He stressed that the market should not rely on artificial pricing.
Phokela suggested subsidizing electric two-wheelers for three to five years, emphasizing that longevity is more important than increasing the subsidy in a single year. He also considered the possibility of reducing the subsidy structure gradually over time.
He acknowledged the reduction in subsidies under the FAME-II scheme, effective from June 1, which saw incentives for electric two-wheelers capped at 15% of the ex-factory price, down from 40%, with a fixed demand incentive of Rs 10,000 per kWh.
Phokela believes that India’s two-wheeler market will achieve 100% electrification by 2030, with about 50-55% penetration expected by 2025.
Regarding Ather’s export plans, he revealed that the company has received interest from overseas markets but has focused on the domestic market so far. However, they are considering exporting soon, with a potential announcement in the next two months. He mentioned that they are targeting markets similar to India for their initial international expansion.
