Ather Energy, a prominent player in the electric two-wheeler industry and backed by Hero MotoCorp, has set its sights on achieving 100% electrification of India's domestic two-wheeler market by 2030. While they are optimistic about the government's support and subsidies provided under the FAME-II scheme, which is set to conclude in March next year, they stress the importance of policy predictability to foster investments and expedite the transition to electric vehicles (EVs). Let's delve into this topic further, examining Ather Energy's wishlist and the implications of their vision for India's EV landscape.The Need for Policy PredictabilityRavneet S Phokela, Chief Business Officer at Ather Energy, highlights the vital role of policy predictability in making informed investment plans for accelerating electric mobility. He emphasizes that unpredictability is detrimental to business growth, as it can lead to shifts in strategy and investments when assumptions about subsidies change. Ather Energy had ambitious plans to establish a third plant with an annual capacity of 10 lakh units, but the uncertainty surrounding subsidies and policy direction has delayed the finalization of this project.Balancing Subsidies and Market RealitiesPhokela acknowledges the current subsidy levels, approximately Rs 21,400 per electric vehicle, as satisfactory. However, he cautions against artificially inflating subsidies, which can create an unsustainable market dependent on government support. Ather Energy believes in the importance of subsidy longevity over higher subsidy amounts in a single year. They propose spreading the available funds over several years rather than exhausting them quickly. Additionally, they are open to gradually reducing subsidy structures over time.The Changing LandscapeThe electric two-wheeler market in India has witnessed adjustments in subsidy policies. The heavy industries ministry reduced incentives for electric two-wheelers from 40% of the ex-factory price to 15%. Simultaneously, the demand incentive was fixed at Rs 10,000 per kWh for electric two-wheelers. This shift reflects the government's evolving approach to balancing support for the industry while encouraging self-sustainability.The Road Ahead: 100% Electrification by 2030Ather Energy's vision of achieving 100% electrification of India's two-wheeler market by 2030 is bold and forward-looking. While Phokela believes that this goal is attainable, he predicts that by 2025, the penetration of electric two-wheelers will reach approximately 50-55%. This gradual transition allows for adjustments and adaptation in line with market dynamics and consumer preferences.Expanding Horizons: Exporting Electric MobilityAlthough Ather Energy has primarily focused on the domestic market, they are now considering exporting their electric two-wheelers to markets that closely resemble India. While no specific details were revealed, it is evident that the company is exploring opportunities beyond India's borders.What is the FAME-II scheme, and why is it important for electric two-wheeler manufacturers like Ather Energy?The Faster Adoption of Manufacturing of Electric Vehicles in India (FAME-II) scheme is a government initiative aimed at promoting electric mobility by providing subsidies and incentives. For companies like Ather Energy, it plays a crucial role in reducing the cost of electric two-wheelers and spurring consumer adoption.How does policy predictability benefit the electric mobility industry?Policy predictability allows companies to make long-term investment plans with confidence. When policies remain stable and consistent, businesses can develop strategies, allocate resources, and drive innovation more effectively.Why is Ather Energy cautious about excessively high subsidies?Ather Energy believes that overly generous subsidies can create an unsustainable market. Relying too heavily on subsidies can distort market dynamics and hinder the natural progression towards self-sustaining electric mobility.What are the implications of the reduced subsidies for electric two-wheelers in India?The reduction in subsidies reflects a shift in government policy towards a more balanced approach. While it may affect the pricing of electric two-wheelers, it also encourages the industry to become more self-reliant and competitive.How does Ather Energy plan to achieve 100% electrification of the two-wheeler market by 2030?Ather Energy is committed to gradually increasing the penetration of electric two-wheelers, targeting approximately 50-55% by 2025. This approach allows for a smoother transition and adaptation to changing market dynamics.
