Policy Predictability For EV Adoption Required To Make Investments: Ather Energy

Policy predictability is needed to make investment plans for accelerating electric mobility in the two-wheeler segment, said Ather Energy's Chief Business Officer Ravneet S Phokela.

The company envisions achieving 100 per cent electrification of the domestic two-wheeler market by 2030 while also gearing up to enter markets similar to India in the near future.

With the FAME-II (Faster Adoption of Manufacturing of Electric Vehicles in India) scheme set to conclude in March next year, Phokela expressed contentment with the government's support and the current subsidy levels. However, he hopes for an extension of the programme for an additional three to five years to further stimulate EV adoption.

Requirements for the next phase

Phokela pointed out two key requirements for the next phase, often referred to as FAME III. He stated, "Two requirements: extend the period of time, and importantly, let there be policy predictability." He stressed that unpredictability is detrimental to businesses because their plans are based on certain subsidy assumptions. Any abrupt changes in these assumptions can disrupt investment plans.

Ather Energy had plans to establish a third manufacturing facility with an annual capacity of 10 lakh units but has yet to finalise its location. Phokela urged for policy consistency, stating, "Should I make a 1 million plot or a half million plot? Whatever the structure of the subsidy, don't change it. Please make it predictable so that we can make investments."

Regarding subsidies, Phokela mentioned that they are content with the current subsidy levels and do not recommend reverting to higher levels because it can distort market dynamics. He emphasised that the market cannot rely on artificial pricing.

When asked about the duration of subsidies for electric two-wheelers, Phokela suggested, "Three to five years...but what we recommend is that longevity is more important than more subsidy in one year. So, this finite amount of money can be spread out over three to four years rather than busted in one year and be done with it."

Reduction of the subsidy structure

Ather Energy is also open to the idea of gradually reducing the subsidy structure each year. The subsidy for electric two-wheelers was reduced on June 1 this year under FAME-II, with incentives capped at 15 per cent of the ex-factory price of vehicles and a fixed demand incentive of Rs 10,000 per kWh for electric two-wheelers.

Regarding the possibility of achieving 100 per cent electrification of the two-wheeler market in India, Phokela stated, "By 2030, that for sure will happen; two-wheelers will happen for sure, but by 2025, we will look at about 50–55 per cent penetration."

On Ather's export plans, Phokela mentioned that while there has been interest from overseas markets, the company has primarily focused on domestic opportunities. However, they are gearing up to start exporting soon, with an announcement expected in the next two months. He noted that they are targeting markets that are more similar to India, making it easier to expand internationally.

(With PTI Inputs)