Bengaluru-based two wheeler electric vehicle maker Ather Energy is set to raise INR 60 Cr (around $7.1 Mn) via non-convertible debentures (NCDs) from InnoVen Capital. 

As a part of this dept funding, Ather will issue 6,000 Series D1 Debentures with face value of INR 1,00,000 (One Lakh) per debenture to InnoVen Capital.

“Pursuant to the order is hereby accorded for allotment of 6,000 Series D1 unlisted, secured, redeemable, non-convertible debentures (“Series D1 Debentures”) having face value of INR 1,00,000 (Rupees One Lakh only) per Series D1 Debenture, by way of private placement through issue of serially numbered private placement offer cum application letter…,” Ather said in its filing with the Registrar of Companies (RoC).

This debt funding marks the third infusion in Ather in less than two months, following an infusion pegged at INR 286.5 Cr in a mix of equity and debt last month. 

Alongside this, Ather’s board also approved raising INR 200 Cr of debt funding from Stride Ventures by issuing up to 20,000 non-convertible debentures.

Last year Hero MotoCorp committed to acquire an additional 3% stake in Ather at up to INR 140 Cr. Not to mention, Ather secured INR 900 Cr from existing shareholders Hero MotoCorp and GIC through a rights issue in September last year. 

It is pertinent to note that Hero MotoCorp owns 40.89% stake in Ather Energy on a fully diluted basis. 

Meanwhile, reports suggesting that existing investor Sachin Bansal had sold a significant portion of his shares in Ather Energy to Zerodha cofounder Nikhil Kamath also emerged earlier this year.

Ather Energy’s net loss widened 22.5% in the fiscal year ended March 31, 2024 (FY24), as per the annual report of Hero MotoCorp.

The EV manufacturer’s net loss jumped to INR 1,059.7 Cr in FY24 from INR 864.5 Cr in FY23, as per the report. Hero MotoCorp owns 40.89% stake in Ather Energy on a fully-diluted basis.

This comes at the heart of Ather eyeing a public listing in the second half of 2024 at a valuation of around $2 Bn. In the run up to its initial public offering (IPO) launch, the startup converted into a public entity last month.

Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy is a major player in the Indian two-wheeler EV market and currently offers two escooters – Ather 450X and Ather 450S.

The startup has two manufacturing plants in Tamil Nadu with a combined capacity to produce 4.2 Lakh scooters annually. Now, it is planning to set up a third manufacturing facility in Maharashtra.

Additionally, Ather Energy has a network of 1,700+ fast charging stations across the country and plans to scale this number up to 5,000 by the end of the year.

The startup competes with the likes of Ola Electric, TVS Motor, Bajaj and Hero MotorCorp’s Vida.

The post Ather Energy Raises INR 60 Cr Debt From InnoVen Capital appeared first on Inc42 Media.

The Centre has extended the duration of the electric mobility promotion scheme (EMPS) 2024 by two months till the end of September. 

In a statement, the Ministry of Heavy Industries (MHI) said that the outlay of the scheme has been increased to INR 778 Cr from INR 500 Cr previously. 

The scheme will look to subsidise the cost of electric two-wheelers and three-wheelers, including registered electric rickshaws, e-carts and L5 category of electric three-wheelers. 

The revised scheme will now target supporting 5.6 Lakh electric vehicles (EVs), including 5 Lakh two-wheelers and 60,709 three-wheelers. Giving a breakdown of the data, the MHI said that 13,590 rickshaws and e-carts as well as 47,119 L5 three-wheelers will be covered under the scheme. 

“With greater emphasis on providing affordable and environment-friendly public transportation options for the masses, the scheme will be applicable mainly to those e-2W and e-3Ws registered for commercial purposes. Further, in addition to commercial use, privately or corporate owned registered e-2W will also be eligible under the scheme,” the statement said. 

Of the total budget, INR 769.65 Cr has been earmarked for subsidising the cost of eligible vehicles. The remaining INR 8.35 Cr has been set aside for the administration of the scheme, including for purposes such as information, education and communication activities and fee for project management agency.

The government also said that the incentives under the rehashed scheme will now only be available for EVs equipped with advanced batteries to “promote advanced technologies”.

“The scheme promotes an efficient, competitive and resilient EV manufacturing industry in the country… For this purpose, (a) phased manufacturing programme (PMP) has been adopted which encourages domestic manufacturing and strengthening of (the) EV supply chain. This shall also create significant employment opportunities along the value chain,” it added.

It is pertinent to note that the MHI had allocated INR 500 Cr for the new EV mobility scheme earlier this year. Initially valid till July 2024, the initiative was aimed at avoiding disruption in the EV space as the Centre’s FAME-II scheme came to an end in March 2024.

The extension comes at a time when the government is said to be working on the third iteration of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme with an estimated outlay of INR 10,000 Cr.

Additionally, the MHI is also said to be mulling a phased manufacturing programme that would have stricter localisation norms for EV manufacturers to qualify for the upcoming FAME-III scheme. 

The post Centre Extends EV Promotion Scheme Till September, Increases Outlay To INR 778 Cr appeared first on Inc42 Media.

The Ministry of Heavy Industries (MHI) is reportedly mulling a phased manufacturing programme (PMP) that would have stricter localisation norms for electric vehicle (EV) makers to qualify for the third phase of the proposed Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-III) scheme.

As per a Business Standard report, the MHI, in discussions with industry stakeholders, suggested reducing the number of components eligible under PMP to 12 from 18 in FAME-III. 

This step would mean that the components such as power and control wiring harnesses, miniature circuit breakers, connectors, electric safety devices, lighting, and body panels would now have to be domestically manufactured.

It is pertinent to note that in 2022, the MHI notified a revised PMP to further promote indigenous manufacturing of EVs, its assemblies/ sub-assemblies and parts/ sub-parts/ inputs of the sub-assemblies. This had 18 items under the list with various effective dates for indigenisation.

The programme envisaged a graded duty structure to promote indigenous manufacturing of EV components over a period of time. It also decided the eligibility criteria to be qualified under the Centre’s FAME-II scheme.

However, indigenisation has been a major hurdle for the country’s EV industry over the last few years, which also led to the government taking punitive actions against industry players. More than a dozen two-wheeler EV manufacturers faced scrutiny for violating the localisation norms and many were slapped with fines of crores of rupees.

As per the recent media report, the MHI has asked automobile companies to provide feedback on the proposed changes.

The ministry and the industry are discussing a clear path for localisation. For instance, electric two-wheelers, three-wheelers, and electric rickshaws can only import cell and associated thermal and battery management systems.

Besides, only semiconductor devices and electronics can be imported for onboard chargers. All other components, including assembly of finished products such as printed circuit board (PCB) manufacturing and soldering of electronics, must be made domestically.

The ministry has reportedly clarified that local suppliers importing finished parts will not qualify for PMP and FAME-III.

The ministry has defined activities qualifying as indigenous sources eligible for PMP and FAME-III, which include local sourcing of raw materials and child parts, local assembly of finished products, and partial import combined with partial local sourcing of raw materials and child parts, followed by local assembly of finished products.

However, EV makers are reportedly planning to raise a key concern regarding the government’s mandatory requirement for domestic PCB manufacturing across components, as the domestic base for PCB manufacturing is very limited.

Meanwhile, there is no clarity yet on the launch of the FAME-III scheme. As per the government data, the Centre passed on INR 6,942.32 Cr as total demand subsidy under FAME-II between April 1, 2019 and March 31, 2024.

The post Centre Seeks Stricter Component Localisation Norms For EVs Under FAME-III appeared first on Inc42 Media.

Bengaluru-based two-wheeler electric vehicle (EV) manufacturer Ather Energy’s net loss widened 22.5% in the fiscal year ended March 31, 2024 (FY24), as per the annual report of Hero MotoCorp.

The EV manufacturer’s net loss jumped to INR 1,059.7 Cr in FY24 from INR 864.5 Cr in FY23, as per the report. Hero MotoCorp owns 40.89% stake in Ather Energy on a fully-diluted basis.

The startup’s revenue from operations rose 0.3% to INR 1,789.10 Cr during the year under review from INR 1,783.60 Cr in FY23.

Ather Energy is yet to file its financial statements for FY24 with the Ministry of Corporate Affairs. 

Ather Energy cost Hero MotoCorp INR 389.77 Cr in losses in FY24 versus INR 192.5 Cr a year ago, as per the annual report.

Despite mounting losses, Hero MotoCorp continues to increase its stake in Ather Energy. In June, Hero MotoCorp announced an additional 2.2% stake acquisition in Ather for INR 124 Cr.

Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy is a major player in the Indian two-wheeler EV market and currently offers two escooters – Ather 450X and Ather 450S.

The startup has two manufacturing plants in Tamil Nadu with a combined capacity to produce 4.2 Lakh scooters annually. Now, it is planning to set up a third manufacturing facility in Maharashtra.

Additionally, Ather Energy has a network of 1,700+ fast charging stations across the country and plans to scale this number up to 5,000 by the end of the year.

The startup competes with the likes of Ola Electric, TVS Motor, Bajaj and Hero MotorCorp’s Vida.

This comes at a time when Ather is said to be eyeing a public listing in the second half of 2024 at a valuation of around $2 Bn. In the run up to its initial public offering (IPO) launch, the startup converted into a public entity last month.

The post Ather Energy’s Net Loss Widens 22.5% To INR 1,060 Cr In FY24 appeared first on Inc42 Media.

In an effort to further provide impetus to the automobile industry, the production linked incentive (PLI) scheme for automobile and auto components has been increased to INR 3,500 Cr in the budget for 2024-25, a 624% jump from INR 484 Cr in the revised estimates of 2023-24. 

Meanwhile, for the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, the government has increased allocation to INR 250 Cr from INR 12.01 Cr in the revised estimates for the financial year 2023-2024.

The PLI scheme corpus for the above two categories reflected the same numbers even in the interim budget of February.

Notably, in the Economic Survey of 2023-24, the government had said that the auto PLI has attracted an investment of INR 67,690 Cr, of which INR 14,043 Cr has been invested till March 31, 2024. So far, 85 applicants have been approved under the auto PLI scheme, which has a budgetary outlay of INR 25,938 Cr from FY23 to FY27.

The PLI-Auto Scheme was introduced in September 2021 with the focused on Zero Emission Vehicles (ZEVs) which include EVs as well as Hydrogen Fuel Cell vehicles. 

Ola Electric, Rajesh Exports, and Hyundai Global Motors Company are among the beneficiary entities under the scheme. Other beneficiaries include Maruti Suzuki, Hero MotoCorp, Tata Autocomp, Mitsubishi Electric, Toyota Kirloskar, Motherson Sumi, Bosch, and Lucas-TVS.

However, the budget did not mention the third phase of the much anticipated Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. 

The report added that The initiative has led to the creation of 28,884 jobs out of the 1.48 Lakh jobs projected. To date, 85 applicants have received approval under the scheme.

Apart from this, the government also outlined an outlay of INR 493 Cr under the Electric Mobility Promotion Scheme (EMPS) to support the EV manufacturing ecosystem in the country. 

This scheme was tenured for 4 months between April 1 and July 31 and was targeted to support 3.72 lakh EVs. However, it was earlier reported that the scheme managed to achieve only 3.6% of its targeted vehicle sales to date.

The breakup of the EMPS outlay marks INR 333.39 Cr for electric two-wheelers, INR 33.97 Cr for electric three-wheelers, electric rickshaws, and e-cart. Besides, an outlay of  INR 126.19 Cr was also earmarked for electric three-wheelers in the L5 category.

Meanwhile, earlier this month union minister for heavy industries and steel, HD Kumaraswamy said that the centre is working on the implementation of the third phase of the FAME scheme but it is unlikely to be implemented in the upcoming Union Budget FY25. The FAME-III scheme was reported to have a budget outlay of INR 10,000 Cr.

This comes at the heart of the EV segment witnessing various developments in the adoption as well as regulatory front. 

Just last week, automaker Bajaj Auto’s managing director (MD) Rajiv Bajaj reportedly said that regulatory uncertainty makes it “tough” to predict profitability for the electric vehicle (EV) segment.

The government in March also introduced a new EV policy that offers a reduced tariff on the import of EVs.

On the broader EV adoption front, the cumulative EV sales in India reached 41,35,077 units by the end of FY2024, as per a report by JMK Research and Analysis. 

Just in FY24, the EV sales surpassed the 1.7 Mn mark with over 55% of the share coming from registered e2Ws, followed by passenger electric three-wheelers (E3W P) with 32% market share.

The post Budget 2024: Ministry Of Heavy Industries Ups PLI Allocation For Auto Industry By 600% appeared first on Inc42 Media.

Automaker Bajaj Auto’s managing director (MD) Rajiv Bajaj reportedly said that regulatory uncertainty makes it “tough” to predict profitability for the electric vehicle (EV) segment.

As per Economic Times, he made the comments while speaking at the company’s annual general meeting (AGM).

Citing his rationale, Bajaj said that predicting profitability is “difficult” as the EV market is dependent on multiple factors, including pricing, which is not in the company’s hands and is determined by the market. 

“It is a very difficult question to answer. Because it depends on many factors. It also depends on price, which is not really in the company’s hands. It’s determined by the market… We have a competitor that believes in dropping prices by INR 10,000 every month,” Baja added. 

This is seen as a dig on IPO-bound Ola Electric, which is among the biggest players in the two-wheeler EV space.

On the policy front, Bajaj said that there is a lot of uncertainty as the “same” subsidy scheme for the EVs keeps on changing from time to time. He was referring to the upcoming Faster Adoption and Manufacturing of Electric Vehicles (FAME)-III scheme. 

Bajaj also cited Minister of Heavy Industries HD Kumaraswamy statement that the scheme would unlikely feature in the Budget 2024-25 but would rather be rolled out in the coming months. On this, the automaker’s MD said that the move would entail INR 10,000 Cr worth of subsidies going away. 

“There is a lot of uncertainty as far as government policy is concerned — not in the bad sense, but in the sense that the same scheme as subsidies for electric vehicles also changes from time to time… It seems that the heavy industries minister has announced that perhaps FAME-III will not be part of the budget. This is a ‘perhaps’, so I’m not sure… But if that happens, then obviously the INR 10,000 subsidy certainly goes away,” added Bajaj. 

It is pertinent to note that a government official later reportedly clarified that the Minister “was quoted out of context” on the EV subsidy scheme. Later, Kumaraswamy also said in a post on X that the Centre is “fully committed to supporting the Indian auto industry”.

Meanwhile, the Bajaj Auto MD also said that the automaker is “not unduly worried” about the subsidy issue as the company is better placed owing to its 20% EBITDA margin with a cash reserve of INR 16,000 Cr to INR 20,000 Cr. 

“There is a side to me that wishes that this segment (EV) should not be profitable for a long time. Because we can be the last scooter standing at the end of the day. Let it continue like this. Let the circus continue. One by one all the monkeys will leave the circus and, in the end, hopefully we will still be standing there,” Bajaj reportedly added. 

Earlier in the day, Kumaraswamy reportedly said that preparatory work is already underway with regards to the FAME-III scheme.

Earlier this year, reports surfaced that the FAME-III scheme would carry a budget outlay of INR 10,000 Cr and will be announced during the Budget. 

Envisaged with an eye on spurring EV adoption in the country, the upcoming FAME-III scheme is expected to focus on public transport such as ebuses as well as two, three, and four-wheelers.

The previous iteration of the scheme, FAME-II, was launched in March 2019 with a total outlay of INR 10,000 Cr to support 10 Lakh electric two-wheelers, 5 Lakh electric three-wheelers, 7,000 electric buses, and 55,000 electric four-wheeler passenger cars through sops and subsidies. 

However, the scheme was plagued by controversies after it emerged that many players flouted localisation norms mandatory to avail these sops. Many of them were penalised by authorities, including Benling India, Okinawa, among others. 

The post Policy Uncertainty Makes It Tough To Predict Profitability For EV Segment: Bajaj Auto MD appeared first on Inc42 Media.

India has made significant progress in adopting electric vehicles (EVs) over the past few years, but charging infrastructure remains a major challenge. 

Notably, this issue is not unique to India. Globally, too, the lack of robust EV charging infrastructure and the significant time required for charging are preventing consumers from switching from internal combustion engine (ICE) vehicles to EVs.

Even Deloitte acknowledges this concern in its recent global survey, which recognises charging time, range anxiety, cost, and battery safety as consumers’ primary concerns with battery electric vehicles.

In India, 43% of the 864 people surveyed expressed concerns about the time required to charge EVs, while 42% were worried about the lack of public EV charging infrastructure.

Now, much is being done by Indians in this area, which has largely proven to be the Achilles heel of this ever-evolving sector. A case in point is Exponent Energy, which has already made headway into the fast-charging domain. With its 15-minute fast charging technology, the company caters to commercial EVs at its dedicated charging stations. 

Similarly, Bengaluru-based EMO Energy has also developed EV battery packs that can be charged in under 30 minutes. 

Meanwhile, Pune-based Clean Electric has gone further. Using nickel manganese cobalt (NMC) and lithium iron phosphate (LFP) cells, the startup is developing 12-minute charging technology for two- and three-wheeler EVs. As per the startup, the icing on the cake is that its batteries are designed to deliver consistent performance across all public charging stations.

Clean Electric: The Inception Saga

Clean Electric was founded in 2020 by former IITBHU students Akash Gupta, Abhinav Roy and Ankit Joshi to address the safety, cost, and convenience issues associated with EV batteries.

“We believe that for EVs to become mainstream and for us to succeed in this space, we need to address cost and convenience. Currently, it takes five minutes to refuel a combustion engine vehicle, while EVs take 60-100 minutes to charge. Our goal was to find a way to charge these batteries in under 10-15 minutes. That’s how it all started in 2020,” cofounder and CEO Gupta said.

The cofounders then started developing a new architecture called direct contact liquid cooling, which is a type of immersion liquid cooling technology. As per Gupta, no one has been able to scale this technology globally so far.

Notably, one of the biggest challenges in EV development pertains to battery management. 

Keeping batteries cool enough to maintain peak performance throughout the lifespan of vehicles is crucial, as overheating could lead to quick degradation of batteries. Besides, fire-related incidents in EVs are common due to poor cell quality or faulty battery management systems (BMS) due to the innately sensitive nature of lithium-ion batteries.

Globally, various cooling systems such as liquid cooling, air cooling, and phase change material cooling are used to keep EV batteries at their optimal temperature. Immersion cooling is a system where the battery cells are directly immersed in a dielectric fluid. However, this has several drawbacks, making this technology difficult to scale.

Despite this Clean Electric claims that its proprietary technology provides high cycle life and performance. Its batteries come with around 3,000 cycle life. The startup claims to have achieved this level of efficiency through intense R&D processes over the last four years. 

For batteries to charge rapidly (say 10 to 15 minutes), a superior cooling architecture is required, which Clean Electric has been able to achieve in sync with its proprietary intelligent battery management system. Gupta said that the startup has been granted four patents in India and the US.

In 2022, Clean Electric raised around $2.2 Mn in a seed funding round led by Kalaari Capital. Its cap table includes institutional investors such as IIM Ahmedabad, Climate Angels, and LetsVenture.

Clean Electric’s Value Proposition

Currently, the startup closely rivals Exponent Energy, but unlike Exponent, whose entire tech stack is around 15-minute chargeable batteries, Clean Electric’s batteries are designed to be compatible with universal charging points.

“You can use any charging station set up by ChargeZone, Tata Power, Shell, HPCL, or IOCL and still charge our EV batteries in 12 minutes. We utilise the vehicle’s own cooling system for charging. Therefore, our batteries can be adopted globally and are not restricted by proprietary charging stations,” Gupta said.

The cofounder added that the startup aims to create a global solution, similar to how smartphones have standardised chargers. 

The EV startup has already built batteries for two, three and four-wheelers. Also, given the cooling system of electric two-wheelers and electric rickshaws are different from the refrigerated cooling system in electric cars and L5 vehicles, the battery warranty for the former ranges between 1,000 to 2,000 cycles.

Clean Electric batteries are already powering EVs manufactured by Bounce Infinity in almost 38 cities. Apart from this, the company is in discussions with multiple other EV OEMs and conducting pilots with international carmakers.

Clean Electric’s Road Ahead

Having started selling its batteries last year, Clean Electric is still operating on a smaller scale. Currently, its batteries are slightly more expensive than others in the market, but the cofounder believes that it could be resolved with scale.

Currently, the startup reports monthly revenue of around INR 1 Cr. It aims to increase this to INR 10 Cr per month by the middle of next year.

The startup is also planning to scale its existing technology to provide battery solutions to electric bus operators. Gupta highlighted that their batteries are undergoing extensive R&D to cater to buses and trucks.

The startup is in advanced discussions with existing and new investors to raise funds in a fresh round soon, though the amount has not yet been disclosed.

In a market that is projected to reach about $114 Bn in size by 2029, Clean Electric, with its current value proposition, is looking at a significant market opportunity if it can scale its tech. With the backing of some marquee investors and an aim to provide fast-charging solutions to every vehicle category, it would be interesting to map the startup’s growth trajectory from this point.

The post How Clean Electric Wants To Dominate The Indian EV Paradigm With Its 12-Minute Battery Charging Tech appeared first on Inc42 Media.

As the Indian government pursues its vision of Viksit Bharat@2047, the focus is on nurturing a low-carbon economy. The high cost of gasoline and its growing shortage are pushing developed nations towards electric alternatives. And India, too, is looking forward to a decarbonised ecosystem, be it shifting freight from road to railways or the robust growth of electric vehicles (EVs) by 2030.    

On the back of growing EV demand, the Indian government approved Phase II of the FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme with an outlay of INR 10K Cr for three years, starting from April 1, 2019. The aim was to incentivise EV makers to promote domestic manufacturing of electric vehicles. The scheme was extended until March 31, 2024, and a four-month programme called the Electric Mobility Promotion Scheme (EMPS) was introduced in April this year to service OEMs during general elections.

However, all’s not well in a country that has never considered electric vehicles a passim fancy. In May 2023, the ministry of heavy industries (MHI), in charge of FAME II, issued show-cause notices to leading electric two-wheeler (E2W) players, including Hero Electric, Okinawa Autotech, Ampere Vehicles (Greaves Cotton), Benling India, Revolt Intellicorp and Amo Mobility. 

The allegation: Violation of FAME II manufacturing norms (more on that later) that may result in certain 2W models getting deregistered. The MHI also asked these companies to refund the entire subsidy amount worth INR 469 Cr spent on their models.

On March 27, 2024, debarment orders were issued to Hero Electric and Benling India, which means these companies cannot leverage the government’s schemes in the future. Okinawa received interim relief as its case was pending in the Delhi High Court.

An MHI official told Inc42 on condition of anonymity. “Non-compliance was established on various occasions. For instance, we tested a Benling India scooter and found almost all components were imported [as per FAME II, at least 50% should be locally manufactured]. Okinawa will also get the debarment order after the Delhi High Court disposes of the case.”

This may well be routine proceedings for the Ministry of Heavy Industries, but the issue may escalate into something more worrying.

“At least three to five OEMs may shut down in the following months, affecting 1K dealerships and more than 5K jobs,” an industry insider closely following the developments said when asked about the potential impact.

According to a report published in August 2023 by the Society of Manufacturers of Electric Vehicles (SMEV), with government subsidies on hold for 22 months, EV OEMs have suffered losses above INR 9,075 Cr.

Again, many dealers had no choice but to opt for legal proceedings against these companies for not meeting the demand as per the dealership agreements.

Speaking to Inc42, Vinkesh Gulati, chairman (Research & Academy) at the Federation of Automobile Dealers Association, revealed an intriguing scenario. According to him, some manufacturers initially fulfilled the PMP norms by purchasing imported components from local vendors. It was an ingenious supply chain where Vendor A imported the components and sold them to Vendor B. Next, Vendor B sold those to Vendor C, and finally, the OEMs purchased those components from Vendor C. 

However, it would be unfair to blame the OEMs alone, given the inadequate manufacturing infrastructure that led to the component crunch at home, said Gulati. 

How Hero Electric & Okinawa Pioneered EVs

Once the commanding force of the Indian E2W space with a combined market share of 70%, Okinawa and Hero Electric’s contributions have now shrunk to less than 1%. Their manufacturing units have been shut down for more than a year, although Okinawa and Benling India are reportedly rolling out a few batches now and then. 

Hero Electric and Okinawa were long lauded for bringing electric two-wheelers to the mainstream by lowering sticker prices. These companies started with lead-acid batteries to keep costs low and consistently commanded more than 50% of the market share in FY20 and FY21. But it dropped to 46% in FY22.

Okinawa’s founder, Jeetender Sharma, claimed several nifty innovations and was confident about the company’s future. “We were among the first ventures in India to mass manufacture high-speed electric scooters. With a top speed of 55 kmph, a loading capacity of 150 kg, a battery range of 88-90 km per charge and enough power in its motor to climb flyovers, the Okinawa Ridge was our breakthrough EV. The Ridge was greatly appreciated in the nascent Indian market, with more than 10K units sold in the first year. Naysayers said I would not even cross 500 units in the first year, but they were wrong,” he told the media a few years ago.  

Just before the lockdown, Okinawa used to sell more than 4.5K units a month, but Hero Electric soon surpassed it, reaching monthly sales of 6K+ EV two-wheelers. But in spite of creating an all-new E2W market in India, early entrants like Hero Electric, Okinawa, Benling India and Ampere heavily depended on imports for the supply of components, according to EV experts. Had India established a robust supply chain in early days, the subsidy misappropriation by wrongfully declaring imported components as locally produced could have been prevented, bringing EVs within striking distance of ICE-powered vehicles by now.   

The Anatomy Of A ‘Faulty’ Business Model

Commenting on the latest developments, Deb Mukherji, CEO of Clean Mobility Solution India, said, “Credit must be given where it is due. Both Hero Electric and Okinawa ushered in the E2W era here. But their dependency on imports cannot be overlooked. They used to purchase all their kits and components from China.” 

No doubt assembly and incremental value-additions (if any) came later. But what happened then could be likened to a trading model, according to Mukherji. 

“Such a model is adopted for two reasons. One may go for it if the business deals in low-value commodities such as toys and candles, which are cheaper to import and have no quality concerns involved. Or you may go for it if there is a strict cost advantage and competition is based solely on price,” he added.

However, the second option is always risky and short-term. If one is selling at INR 100 today, someone may offer it at INR 90 tomorrow, forcing others to lower their prices. Competing purely on cost is unsustainable because someone can always undercut the price.

As the market developed and demand grew, these companies were under significant pressure. They tried to shift to the next level of manufacturing but manufacturing prowess was not their strength.

According to an analyst who did not want to be named, a close look at the companies’ financials would reveal how their dependency on FAME II incentives increased annually, rising from 1% to 20% of the operational revenue. It was understandable in the beginning when they had to import all components. But unlike other players, they maintained the same approach even when local component manufacturers were around. Their expenses also reveal little or no allocation for R&D, indicating a lack of long-term focus.

Randheer Singh, CEO of the EV value chain consulting ForeSee Advisors and former director of NITI Aayog, concurred saying that Hero Electric’s and Okinawa’s decline in market share could be attributed to intense competition from brands like Ola and TVS, which excel in affordability and extensive service networks. Product quality and the recent subsidy withdrawal for non-compliance have also impacted their market positioning.  

Singh believes enhancing product reliability and leveraging government incentives will be crucial for their comeback.

FAME II Violation Hurts EV Ecosystem  

The Indian government’s ambitious subsidy scheme to promote EVs was marred by alleged norms violations after whistleblowers started complaining in 2022. But before we enter the contentious ground, a quick look at the backstory will not be out of context.

The government launched the National Electric Mobility Mission Plan (NEMMP) in 2013 to promote hybrid and electric vehicles, aiming to hit 6-7 Mn sales by 2020 and enhance fuel security. Since EVs cost 30-40% more than their ICE counterparts, the FAME programme was introduced under NEMMP in March 2015 to make these ‘green’ vehicles more affordable through subsidies.

The first phase of FAME continued until March 31, 2019, with an allocation of INR 895 Cr, out of which INR 529 Cr was released. The remaining amount was reallocated to the FAME II scheme.

FAME I focussed on early market creation through demand incentives, in-house technology development and domestic production to help the industry reach self-sufficient economies of scale. It provided demand incentives for the adoption of 2.8 Lakh EVs (2Ws, 3Ws and 4Ws) and 425 electric and hybrid buses, besides the development of 520 charging stations.

FAME II came into force in April 2019 (FY20) for a three-year span, with an allocation of INR 10K Cr (including the remaining INR 366 Cr from FAME I). However, with the onset of the Covid-19 pandemic in 2020 and the following socio-economic setbacks, its subsidy period was extended to March 2024. Its focus areas included financial incentives for EV purchase, charging infrastructure development and all other related activities.

But the flagship scheme’s timeline got disrupted again. Based on the feedback from industry stakeholders, FAME II was overhauled in June 2021 and upfront costs were lowered to ensure faster EV adoption. Earlier, the government used to offer an incentive of INR 10K per kilowatt-hour (kWh indicates energy consumed per hour) for two-wheelers, but this was revised to INR 15K per kWh, with the maximum cap rising from 20% to 40% of the vehicle cost.

Maximum ex-factory prices for 2Ws, 3Ws and 4Ws remained unchanged at INR 1.5 Lakh, INR 5 Lakh and INR 15 Lakh, respectively, for manufacturers to avail of FAME II incentives.

EV makers were mandated to use locally produced components such as battery packs, traction motors, controllers, vehicle control units, onboard chargers and instrument panels in a phased manner. All other components must be sourced locally to meet FAME II compliance and obtain subsidies under the scheme. Subsequently, OEMs had to declare domestic value addition (DVA), a metric indicating how much value an EV manufacturer has created locally for every EV unit. At least 50% of vehicle components should be sourced from India to qualify for the FAME II incentive scheme.

Things took a bad turn when the MHI received several letters from whistleblowers between April and September 2022. They claimed that EV manufacturers such as Okinawa, Hero Electric, Ampere and Benling India had flouted FAME II procurement norms and imported components, which were supposed to be manufactured or assembled in India.

According to these letters, some of the components such as DC-DC converter, electronic throttle, vehicle control unit, onboard charger, traction motor and traction motor controller were supposed to be sourced locally from April 1, 2020. But a few E2W OEMs continued to use imported parts even after the deadline.

This violates the PMP framework of the FAME II scheme.

The MHI probed as many as 13 EV companies. Among these, six E2W players, including Hero Electric, Okinawa, Ampere Vehicles (Greaves Cotton), Benling India, Revolt Intellicorp and Amo Mobility, allegedly violated PMP/DVA norms. Others, such as Ather Energy, Ola Electric, TVS and Vida (from Hero MotoCorp), were accused of violating pricing norms. 

An MHI official told Inc42 that Hero Electric, Okinawa, Benling India and others had confessed during the probe that most of their components were imported. Among these were chassis, wheel rims, electric switches, steering locks, braking systems, suspensions, light sets and even body panels.

The tests were carried out by the International Centre for Automotive Technology (ICAT). In its strip-down analysis report, ICAT said both Hero Electric and Okinawa imported DC-DC converters, traction motors, onboard chargers, wheel rims and buzzers in FY22 and FY23.

“We are not even talking about controllers and motors,” the MHI official said. “In the case of Okinawa, we found even the tyres, horns and seats were imported. Literally, the entire scooter. How could we pass it off?”

After receiving the show-cause notice last year, Hero MotoCorp, TVS Motor Company, Ather Energy and Ola Electric deposited around INR 300 Cr as a penalty for violating the guidelines under the FAME scheme. 

A source close to the development made another point. “The certification process of the testing agencies had their interpretational issues at the time. Also, some OEMs used to send one model for certification and sold another variant post-certification. Even if they incorporated locally made components for testing purposes, the rest of the models featured imported parts.”

Rebuttal From The OEMs: What Hero Electric And Others Have To Say

Although most EV players have refunded past subsidies and publicly admitted wrongdoing, Hero Electric, Okinawa and Benling India have approached the court for a resolution.

According to a press statement by the industry body SMEV, the MHI owes the OEMs INR 1,200 Cr [unpaid earlier subsidies for which invoices were submitted]. If the ministry’s demand for a subsidy refund of INR 469 Cr under FAME II is actualised, it will have INR 1,669 Cr in all. This means the INR 2K Cr budget for the E2W sector will remain largely non-disbursed. In that case, the non-compliance becomes a non-issue, although the FAME II scheme would have become a complete non-starter [minus the subsidies].

A former SMEV official further argued if the certified models breached the FAME II framework, the responsibility should first fall on the testing agencies, not the OEMs.

The testing agencies in question include the Automotive Research Association of India (ARAI) in Pune, Maharashtra; the International Centre for Automotive Technology (ICAT) at Manesar, Haryana; the Global Automotive Research Centre at Oragadam, Tamil Nadu, and the National Automotive Test Tracks at Pithampur, Madhya Pradesh.

“Has the MHI punished any of these testing agencies? No. But they are punishing the OEMs who sold the models certified by these agencies,” a senior official working for Hero Electric said, requesting anonymity. “The MHI is asking for refunds at a time when these subsidies have already been paid to end users. We wanted to recall buyers’ subsidies and deposit them back to the ministry, but didn’t get approval for the same,” he added.

“Although Ampere, Amo and Revolt paid their dues, their models have still not been approved by the MHI. So, paying the subsidy back does not offer them any lifeline. As we no longer have financial backing, we won’t be able to compete with other players loaded with subsidies,” the employee observed. 

He also brought forward another anomaly. “Govt officials have alleged that we bought components from a vendor whose certification had already expired. Four-wheeler OEMs did it but the exception was extended to them for another year. We didn’t have that advantage, but rules must be the same for everyone. Approval for a new vendor would have taken months and we had no choice but to purchase components from the same company.”

The MHI official mentioned above called it a feeble excuse. “Per the PMP framework, different deadlines were set for component imports. After consultations with industry representatives, those timelines were specifically tailored for two-wheelers, three-wheelers and four-wheelers. So there should have been no bottlenecks regarding procurement.”

While Hero Electric officially declined to comment on these allegations and counter-allegations, Okinawa Autotech did not respond to Inc42 queries till the time of publishing this article. 

How The Legal Spat Panned Out

In September 2022, the customs commissioner in Ludhiana (the jurisdiction covers Punjab, Himachal Pradesh, and Chandigarh) issued a show-cause notice to Hero Electric under Section 28(9)(b) of the Customs Act, 1962. The notice alleged that the company imported whole e-scooters instead of their components.

In its response on February 14, 2023, Hero Electric claimed to have sufficient evidence to prove that only parts, not entire scooters, were imported.

In July 2023, after Hero Electric models were deregistered from the FAME subsidy portal, the company filed a petition in the Punjab and Haryana High Court. The petition argued that despite the company’s response, the Customs did not follow any procedures or take steps to finalise the proceedings on the show-cause notice.

On July 27, the HC directed the Indian government to complete the proceedings by issuing a final order on the show-cause notice by November 27, 2023.

In April 2024, the company filed another petition against the Indian government’s deregistration and debarment order. This will be heard on July 30, 2024.

In November 2023, Okinawa Autotech approached the Delhi High Court challenging the MHI order dated October 9, 2023, which deregistered Okinawa scooters from the FAME II portal and demanded a refund of the entire subsidy amount of INR 116.85 Cr.

Benling India also approached the Delhi High Court in May 2024, challenging the show-cause notice issued on May 25, 2023, and the debarment order dated March 7, 2023. The company argued that the scooter in question was obtained from a third party and, therefore, the company was not liable for any foreign components fitted in the vehicle.

Meanwhile, Hero Electric was taken to the Delhi High Court for non-payment of rent. The owner of the premise alleged that rent worth INR 68 Lakh had not been paid and requested arbitration. These matters, too, will be heard on July 23, 2024.

Kaybee Overseas, a vendor of Hero Electric, filed a petition regarding non-payment. Another dealer, Aurum Automobile, also approached the Delhi High Court Mediation and Conciliation Centre for a settlement with the company.

In April 2024, the Delhi HC appointed a sole arbitrator to adjudicate the dispute between Okinawa and Goyal Ebike, one of Okinawa’s dealers. Goyal Ebike alleged that Okinawa failed to supply its e-scooters despite multiple calls and email messages. The case will be heard on July 15, 2024.

EV Majors In A Deep Hole

The legal storm overtook the EV companies when Hero Electric was looking for strategic partners to raise $250 Mn and Okinawa was aiming to bag $100 Mn. They raised part of the capital through compulsorily convertible preference shares (CCPS) and compulsory convertible debentures (CCD), but the plan went south as the news of model deregistration and subsidy refund hit the headlines.

The current turmoil has brought the three companies to the brink of closure. Hero Electric’s plant has reportedly remained idle for the past 15 months, while the Benling India unit in Manesar has been non-operational for more than a year. Okinawa, too, is facing similar challenges, as it has invested substantially to set up a second unit in Karoli, Rajasthan (the first one is in Alwar). To fulfil some outstanding orders and thus avoid legal conflicts with their dealers, Okinawa and Benling have intermittently resumed operations and paid their workers daily wages, sources from these companies told Inc42.

More stories of suffering follow. More than 80% of permanent employees in Hero Electric and Benling have been laid off since May 2023. At Benling India, nearly all employees have been dismissed, barring four or five, said a former senior employee.

A host of component suppliers have not been paid yet and 1K+ dealers have run out of supplies after regular production has gone on hold. Assuming each dealership employed around five people, each supporting a family of four, nearly 20K lives have been impacted.

The MHI decision has impacted thousands of people. Vendors have not received payments for component supplies, and dealers face supply shortages after regular production is put on hold. This has affected 1K+ dealerships nationwide, affecting nearly 20,000 lives (assuming each dealership employed around five people and each supported a family of four).

Numerous dealerships listed on these companies’ websites have shut down, with some switching to other brands. When queried, sales staff cite a lack of support from these brands as the reason for the shift.

How the dealers are trying to sell these e-scooters now can be gleaned from a recent interaction. When we called a Benling India dealer regarding the availability of those E2Ws, he said, “We currently have two scooters in stock, but could not communicate with the company for the past few months. If you want to buy, I can offer some parts and provide a personal guarantee. But I cannot extend that assurance on behalf of the brand.”

This has impacted the owners as well. A significant number of users have not been getting after-sales services and support from these brands.

Summing up the situation, one of the E2W founders said, “Although this may not have been the MHI’s intention, it has overlooked the humane angle here when it implemented the decision. The MHI is primarily at fault in this scenario. The goal should have been to enforce the law in real-time, but the ministry failed miserably. After identifying the FAME II violation, it should have issued a warning and extended the deadline by a few months. Such extreme punishments are typically reserved for repeat violations, not for the first-time offenders, especially in a nascent market.”

Driving the adoption of EVs in India is not just about nurturing a new industry and market but is also critical for India’s sustainable development goals. The hurdles such as the FAME-II violation severely dent the confidence of the EV ecosystem, but execution and implementation gaps from the government side have also resulted in value erosion for the companies. For the sake of India’s EV future, many in the industry hope this is the last such fracas between EV makers and policymakers.

[Edited by Sanghamitra Mandal]

The post Will FAME-II Violation Blow Hero Electric, Okinawa And Benling India Off The EV Highway? appeared first on Inc42 Media.

Union commerce and industry minister Piyush Goyal has expressed concern over the drop in sales of electric vehicles (EVs) in India during the April-June quarter and implored the industry to push for greater adoption of EVs.

Addressing the National Executive Committee Meeting, organised by the Federation of Indian Chambers of Commerce & Industry (FICCI), the minister said, “I was pained when I saw the number of electric vehicles sold in India had fallen in the past quarter. I was truly, truly pained.”

Goyal asked companies to encourage their employees to use EVs, saying it would result in the growth of charging infrastructure, which in turn would provide a boost to the entire EV ecosystem. “With scale, the cost of the automobile will come down,” he said.

Two-wheeler EV registrations in India dipped more than 7% to 3.46 Lakh units in Q1 FY25 from 3.72 Lakh in the corresponding quarter of last year, according to the Ministry of Road Transport and Highways’ Vahan portal.

Amid a slowdown in demand for EVs, IPO-bound Ola Electric and legacy automakers TVS Motor and Bajaj Auto witnessed a sharp decline in their two-wheeler EV registrations during the period.

Speaking to Inc42, Vinkesh Gulati, former president of the Federation of Automobiles Dealers Association of India (FADA), said that the EV sales have been declining over the last six months or so due to a combination of factors such as “high EV prices, uncertainty around the quality of batteries and lower subsidies for EVs”.

Notably, the Centre’s FAME-II scheme ended on March 31 this year. Amid industry-wide demand for an extension of the scheme, the Centre introduced an INR 500 Cr scheme, the Electric Mobility Promotion Scheme 2024, to promote emobility from April 1 till July end.

However, the government has slashed the demand incentive amount under the new scheme.

Meanwhile, the Centre is working on new initiatives to boost EV sales in the country. The Ministry of Heavy Industries (MHI) is working on setting up a task force to create a roadmap for the EV industry to further increase vehicle electrification.

The MHI is working with several agencies such as the Retail Motor Industry Organisation (RMI), the India Energy Storage Alliance (IESA), and the Indian Battery Swapping Association (IBSA) to set up the task force via interaction with multiple stakeholders across the EV ecosystem.

Meanwhile, the Centre is also expected to announce the FAME-III scheme in the Union Budget 2024-25, which is scheduled to be presented on July 23.

The post Union Minister Piyush Goyal Expresses Concern Over Falling EV Sales appeared first on Inc42 Media.

Over three months after the Centre rolled out INR 500 Cr Electric Mobility Promotion Scheme (EMPS) 2024 to promote the sale of electric two- and three-wheelers, the scheme has reportedly managed to achieve only 3.6% of its targeted vehicle sales to date.

Citing data from the Ministry of Heavy Industry (MHI), Business Standard reported that of the 372,215 vehicles aimed for under EMPS, only 13,499 were sold.

EMPS, with a budget of INR 500 Cr, was launched on April 1 and was formulated to run for four months, expiring on July 31.

On the category front, the sales targets under EMPS include 333K electric two-wheelers (e2Ws), 38.8K electric three-wheelers (e3Ws), including 13.5K rickshaws and e-carts, and 25,238 L5 electric three-wheelers.

Among these categories, the highest sales were in the e2Ws segment, with 12,457 units sold, representing 3.7% of the target. 

In contrast, the e-rickshaws and e-carts segment saw least success, achieving only 0.3% of its sales target. The e3Ws (L5 category) managed to reach 4% of their target.

Notably, the EMPS also reduced incentives significantly. For instance, the incentive for e2Ws went down from INR 66,000 to INR 10,000, and for e3Ws, from INR 111,500 to INR 25,000.

It’s important to note that EMPS was introduced during a period of high industry demand for incentives as the FAME II programme was approaching its expiry on March 31. 

However, after the announcement of EMPS, the government extended the FAME II programme by four months with an additional allocation of INR 500 Cr.

FAME II was introduced in 2019 with an initial outlay of INR 10,000 Cr for supporting the adoption of EVs in the country. In February this year, the Finance Ministry approved an additional INR 1,500 Cr for the second phase of FAME-II.

The development comes at a time when the government is aiming to make India a manufacturing hub for EV makers with various schemes and incentives. 

Notably, in March, the government also introduced a new EV policy that offers a reduced tariff on the import of EVs.

On the broader EV adoption front, the cumulative EV sales in India reached 41,35,077 units by the end of FY2024, as per a report by JMK Research and Analysis. 

Just in FY24, the EV sales surpassed the 1.7 Mn mark with over 55% of the share coming from registered e2Ws, followed by passenger electric three-wheelers (E3W P) with 32% market share.

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Bajaj Auto CEO Rajiv Bajaj has said that electric two-wheeler sales in the country are yet to reach an “inflection point” despite subsidies and discounts offered by manufacturers.

Bajaj made the comments on the sidelines of an event to launch the automaker’s CNG motorcycle “Freedom 125”, according to NDTV Profit.  

Bajaj said that penetration of electric two-wheelers is still 4% to 5% despite overall EV sales growing in the past few years and a wider shift in the Indian automotive sector. 

“There’s no party happening as of now in the electric two-wheeler space,” Bajaj said. 

He also said that penetration of electric vehicles (EVs) in the two-wheeler space is low despite manufacturers offering discounts to the tune of almost INR 10,000 per unit every other month. 

He also highlighted the subsidies and tax breaks offered by the government to increase the sales of escooters and ebikes. 

“Something is holding the consumer back and the question is what? We think it’s a combination of things but more than anything it is the unfamiliarity with the technology, the concerns with range, the concerns with charging, and the concerns with safety,” Bajaj said as per Fortune India. 

The Fortune India report also cited Bajaj as saying that a “bunch of people” are not doing favour to the EV industry by bringing in “rubbish from China” and sending it to dealerships. He added that the EV space is yet to “hit the sweet spot” as far as electrification is concerned.

His comments come at a time when EV two-wheeler registrations have been growing. As per government data, the registrations of two-wheeler EVs in the country soared 34% year-on-year (YoY) to 8.49 Lakh units in 2023.

Meanwhile, the Centre plans to continue offering sops and subsidies and the stage is said to be all set for the announcement of the third edition of the FAME scheme in the upcoming Union Budget, with an expected outlay of INR 10,000 Cr. The scheme has been envisaged to spur the adoption of EVs in the country. 

The post No Party In 2-Wheeler EV Space Despite Subsidies & Discounts: Bajaj Auto CEO appeared first on Inc42 Media.

IPO-bound electric two-wheeler manufacturer Ather Energy is setting up its third manufacturing facility in Maharashtra to manufacture escooters and battery packs.

Ather currently has two manufacturing facilities in Tamil Nadu. One of these is for battery production and the other for vehicle assembly. Operations will continue as it is at these units, the startup said in a statement.

The new facility in Maharashtra’s Chhatrapati Sambhaji Nagar will allow the electric vehicle (EV) startup to get closer to more markets in the country, thereby reducing logistics cost and hastening the delivery of its finished products to customers. 

Speaking on the development, Devendra Fadnavis, deputy chief minister of the state, said, “Maharashtra offers a conducive business environment and continues to be a top destination for investments… We are happy to have Ather in Maharashtra, solidifying the state’s position as India’s leading automotive and manufacturing hub.”

Founded in 2013 by Swapnil Jain and Tarun Mehta, Ather is one of the leading players in the Indian electric two-wheeler market in the country. After building its market on its 450 series of escooters, the startup recently launched a family escooter series Rizta and forayed into the smart helmet category.

The startup also operates a charging network, Ather Grid, and makes energy storage systems for the EV. 

Announcing the plans for setting up the new manufacturing facility, Ather cofounder and CTO Jain said, “With our expanding product portfolio and the increasing consumer demand for our scooters, we decided to strategically diversify our production capabilities to an additional location that will be closer to more markets in the country. The new manufacturing facility will not only rationalise our logistic costs but will also hasten the delivery of finished products to our customers.”

As per Vahan data, the startup’s total vehicle registrations rose to 1.09 Lakh units in FY24 from 76,941 units in FY23. However, it has been facing increasing competition from the likes of IPO-bound Ola Electric and legacy automotive players like TVS Motor and Bajaj. 

Ather, in the statement, said that with the demand for electric two-wheelers increasing, it is focussing on increasing its production capacity, expanding its product portfolio, retail outlets, and charging infrastructure across the country. The startup currently has over 200 Experience Centres and over 1,900 fast chargers across India.

As part of its IPO preparation, Ather recently turned into a public entity, changing its name to Ather Energy Ltd from Ather Energy Pvt Ltd earlier. The startup is backed by Hero MotoCorp, GIC, NIIF, Nikhil Kamath, and Tiger Global. 

Ather’s turnover stood at INR 1,753.8 Cr in the year ended March 31, 2024 (FY24), a decline of 1.5% from INR 1,780.9 Cr reported a year ago. Its net loss stood at INR 864.5 Cr in FY23.

The post Ather Energy To Set Up Third Manufacturing Facility In Maharashtra As EV Sales Rise appeared first on Inc42 Media.

Electric two wheeler maker Ather Energy has partnered with TATA Indian Institute of Skills (TIIS) to offer specialised training programmes across the EV sector.

The programmes will be designed to equip trainees with technical knowledge in battery systems, electric motors, power electronics, charging infrastructure and vehicle safety, Ather Energy said in a statement.

Besides, these will also offer trainees with practical experience across EV maintenance, repair and diagnostics, apart from soft skills like communication, teamwork and problem solving.

As part of this partnership, Ather Energy will also provide TATA IIS with vehicles, motors, batteries and other hardware equipment to build EV labs across all its facilities, the statement added.

Founded by Tarun Mehta and Swapnil Jain in 2013, Ather Energy is one of the major players in the Indian electric two-wheeler market. Besides manufacturing and servicing electric two wheelers, the startup also operates its own charging infrastructure and is involved in storage, distribution and management of electric power and other ancillary services.

Ather Energy closely competes against Bhavish Aggarwal’s Ola Electric, which at the moment is dominating the EV two-wheeler segment in the country. It is pertinent to note that Ola Electric is also looking to go public and received the market regulator SEBI’s approval last week for its INR 5,500+ Cr IPO.

Meanwhile, TATA IIS is a training institution which offers vocational training facilities to enhance skill development.

“The growing popularity of EVs in India has spurred the demand for a specialized and diversified skill set within the larger automotive sector. To actively bridge this gap, we are delighted to work with Tata IIS in providing a skilling solution for the EV sector by developing training programs for EV technicians and battery specialists” said Jain.

The development comes on the back when it was reported that Ather Energy’s board passed a resolution last week, during its annual general meeting, to convert the startup into a public company from private.

Following this, the startup’s name has changed to Ather Energy Ltd from Ather Energy Pvt Ltd earlier, its regulatory filings revealed.

Besides the conversion into a public entity, the startup is also increasing its authorised share capital to INR 50 Cr from INR 93.6 Lakh. It will also issue bonus shares to its shareholders and allot them 2.96 bonus equity shares for every share held. 

This comes months after it was reported that the electric vehicle (EV) startup roped in HSBC Holdings Plc, Nomura Holdings Inc, and JP Morgan Chase & Co to handle its initial public offering (IPO). Ather Energy was said to be eyeing a listing in the second half of 2024 at a valuation of around $2 Bn.

Earlier this month, Inc42 reported that Ather Energy raised INR 286 Cr through a mix of debt and equity from Stride Ventures and its cofounders. While Stride Ventures invested around INR 200 Cr via debentures, cofounder Tarun Mehta and Swapnil Jain infused INR 43.28 Cr. 

Ather Energy’s net loss surged 150% to INR 864.5 Cr in FY23 as against INR 344.1 Cr in the previous year. Meanwhile, operating revenue jumped 4.3X year-on-year (YoY) to INR 1,783.6 Cr during the year under review.

As per Inc42’s report, the Indian EV market houses various small as well as large EV startups and is estimated to reach $110.74 Bn by 2029. Startups like Ather Energy, Altigreen Propulsion Labs, BluSmart, and Exponent Energy have now come up with sustainable solutions for mobility.

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Taking a major step towards its initial public offering (IPO), electric two-wheeler manufacturer Ather Energy’s board passed a resolution last week, during its annual general meeting, to convert the startup into a public company from private.

Following this, the startup’s name has changed to Ather Energy Ltd from Ather Energy Pvt Ltd earlier, its regulatory filings revealed.

Besides the conversion into a public entity, the startup is also increasing its authorised share capital to INR 50 Cr from INR 93.6 Lakh. It will also issue bonus shares to its shareholders and allot them 2.96 bonus equity shares for every share held. 

The developments come months after it was reported that the electric vehicle (EV) startup roped in HSBC Holdings Plc, Nomura Holdings Inc, and JP Morgan Chase & Co to handle its initial public offering (IPO). Ather Energy was said to be eyeing a listing in the second half of 2024 at a valuation of around $2 Bn.

Earlier this month, Inc42 reported that Ather Energy raised INR 286 Cr through a mix of debt and equity from Stride Ventures and its cofounders. While Stride Ventures invested around INR 200 Cr via debentures, cofounder Tarun Mehta and Swapnil Jain infused INR 43.28 Cr. 

Besides, Hero MotoCorp acquired an additional 2.2% stake in Ather Energy for INR 124 Cr. Hero MotoCorp bought this stake from Flipkart cofounder Binny Bansal, who exited the startup by selling his entire 7.5% stake. Bansal sold the remaining part of this stake to Zerodha cofounder Nikhil Kamath.

Hero MotorCorp now owns around 40% stake in the EV startup. 

Founded in 2013 by Jain and Mehta, Ather Energy is one of the major players in the Indian electric two-wheeler market. Besides manufacturing and servicing electric two wheelers, the startup also operates its own charging infrastructure and is involved in storage, distribution and management of electric power and other ancillary services.

Ather Energy’s net loss surged 150% to INR 864.5 Cr in FY23 as against INR 344.1 Cr in the previous year. Meanwhile, operating revenue jumped 4.3X year-on-year (YoY) to INR 1,783.6 Cr during the year under review.

Ather Energy closely competes against Bhavish Aggarwal’s Ola Electric, which at the moment is dominating the EV two-wheeler segment in the country. It is pertinent to note that Ola Electric is also looking to go public and received the market regulator SEBI’s approval last week for its INR 5,500+ Cr IPO.

The post Exclusive: Ather Energy Converts Into A Public Entity As IPO Plans Gather Steam appeared first on Inc42 Media.

The Bureau of Indian Standards (BIS) has introduced two new standards to enhance the safety and quality of electric vehicles (EVs) in India. 

Called IS 18590: 2024 and IS 18606: 2024, the two new standards pertain to L, M and N categories of electric vehicles. It is pertinent to note that while L category relates to two-wheelers, M and N categories correspond to four-wheelers and good trucks respectively. 

In an official statement, authorities said that the new standards mandate stringent safety and performance requirements for powertrains and batteries. 

“The BIS has introduced two new standards, IS 18590: 2024 and IS 18606: 2024, aimed at enhancing the safety of EVs in the L, M, and N categories. These standards focus on the critical component of electric vehicles—the powertrain—ensuring it meets stringent safety requirements. Additionally, they emphasize the safety and performance of batteries, ensuring they are both powerful and secure,” added BIS.

With this, India now boasts 30 local standards dedicated to electric vehicles and their accessories, including charging systems. 

For the uninitiated, IS 18590: 2024 mandates stringent safety protocols for powertrains of EVs, which are a critical element of any electric vehicle and covers components such as the motor, battery pack, and transmission system. This will enable BIS to mitigate risks related to EV operation and maintenance. 

On the other hand, IS 18606: 2024 sets benchmarks for battery durability, thermal management, and safety features. This, in turn, is expected to increase the safety and reliability of electric vehicles plying on Indian roads. 

The new mandates come as temperatures hit scorching highs in Northern India. In the past two years, summers have coincided with a spurt in incidents related to EV fires. 

In April this year, a Bengaluru Metropolitan Transport Corporation (BMTC) electric bus caught fire but no casualties were reported. 

In March, a shocking video emerged online which featured at least four Ather Energy escooters engulfed in flames inside a transport truck. Multiple such incidents have also been reported online so far but questions remain over their veracity. 

In the past too, a spate of such fire incidents grabbed headlines across the country and included major EV players such as Ola Electric, Okinawa Autotech, and Pure EV, and even legacy brands like Tata.

As a result, many users and critics have raised questions over the safety of such vehicles and have sought government intervention in reining these incidents. Such was the clamour that the CTO of Dutch semiconductor design company NXP, Lars Reger, said that the use of “cheap” laptop chips in battery management systems (BMS) of EVs was responsible for such fire incidents.

Meanwhile, the Centre has cracked the whip on such incidents and has instituted multiple probes to investigate the matter. Last month, authorities also reportedly ordered an investigation into a fire incident involving a Tata Motors electric vehicle. 

Despite the issues, EVs continue to see rapid adoption in the country, primarily in the two-wheeler space. As per data from the VAHAN portal, EV sales stood at 1.23 Lakh in May 2024, up 8.8% sequentially from April’s 1.12 Lakh units.

Additionally, the Ministry of Heavy Industries, in April, also allocated INR 500 Cr for the new Electric Mobility Promotion Scheme 2024 till July 2024 to promote EV sales in the country.

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After the FAME-II fiasco last year, the government is reportedly set to penalise the electric automakers that opt for FAME-III subsidy, if they do not adhere to the localisation norms laid down under the new scheme.

As per an ET report, the EV companies certifying vehicles for subsidies under FAME-III would have to undergo a techno-commercial audit twice a year to ascertain they are meeting the localisation guidelines. 

A government official informed the publication that in the case of any irregularities to the norm, the manufacturers would be liable to return the claimed government subsidies with an interest, which would be at a rate 3% higher than the marginal cost of funds-based lending rate (MCLR) in penalties.

“We are putting in place a committee with representatives from testing agencies, which will audit every six months whether companies are meeting the localisation norms in vehicles certified under FAME,” the official was quoted as saying. “In the event of non-compliance, they will have to refund claimed subsidies with interest at a higher rate than MCLR.”

It is to be noted that FAME-III is likely to be announced in the upcoming budget next month with an expected outlay of INR 10,000 Cr to keep boosting the adoption of EVs in the country. The upcoming scheme is likely to focus significantly on the adoption of public transport such as ebuses along with two- three- and four-wheelers, while also focusing on charging infrastructure.

The earlier iteration of FAME, the FAME-II, which ended in March this year, was launched in 2019 with a total outlay of INR 10,000 Cr. It was slated to support 10 Lakh electric two-wheelers, 5 Lakh electric three-wheelers, 7,000 electric buses, and 55,000 electric four-wheeler passenger cars through subsidies.

However, following multiple fire-related incidents with EVs in the country, more than a dozen of the top electric two-wheeler players of 2022, came under the government’s scrutiny last year for not adhering to the localisation norms and were heavily penalised.  The most prominent players of 2022 like Okinawa Autotech, PureEV, Hero Electric and Ampere, slowly lost their leading positions in terms of vehicle sales.

Following the misappropriation of the subsidies, the MHI cut incentives under the FAME-II scheme last year to 15% of the ex-factory price of a two-wheeler EV from 40% earlier while also slashing the demand incentive.

The Ministry of Heavy Industries (MHI) also sent notices to the OEMs under the scanner to recover subsidies worth a total of INR 469 Cr for flouting the localisation norms.

The MHI’s decision to put an embargo on some of the manufacturers from listing their sales on the official National Automotive Board (NAB) portal, penalising them, and issuing notices to the OEMs to return the subsidy amounts, led to a huge outcry in the EV industry.

Commenting on the government’s third iteration of FAME, the official told the publication that the objective of the scheme is to support and accelerate consumer adoption of EVs and simultaneously create a local ecosystem to bring their costs down over time. 

“It goes against the very purpose of the scheme if companies do not source locally. It will hinder the development of a vendor base in the country,” the official was quoted as saying.

The post FAME-III Subsidy: Centre To Penalise EV OEMs If Localisation Norms Flouted appeared first on Inc42 Media.

With the newly formed union cabinet expected to continue subsidising electric vehicles through demand incentives, the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme is set to get a third iteration during the upcoming Budget, slated for next month.

While reports about a FAME-III launch, with an INR 10,000 Cr budget, have been doing rounds since the beginning of the year, there were speculations about whether the government would spend further on subsidising EVs, particularly after last year’s FAME-II fiasco.

However, a senior government official informed ET that the Ministry of Heavy Industries (MHI) has already sent a plan for the scheme for vetting to the Prime Minister’s Office (PMO).

The government will reportedly take a final call on the proposal closer to the union budget, keeping the fiscal situation in view.

As per the report, the FAME-III scheme would support electric two- three- and four-wheelers. Earlier reports suggested that the new scheme would look to provide more support to electric three-wheelers and public transportation like ebuses.

The earlier iteration of FAME, the FAME-II, which ended in March, was launched in 2019 with a total outlay of INR 10,000 Cr. It was slated to support 10 Lakh electric two-wheelers, 5 Lakh electric three-wheelers, 7,000 electric buses, and 55,000 electric four-wheeler passenger cars through subsidies.

After finding misappropriation of subsidies by some original equipment manufacturers (OEMs), the MHI last year lowered the incentive under the FAME II scheme to 15% of the ex-factory price of a two-wheeler EV from 40% earlier. 

Despite industry-wide demand for the extension of FAME-II or introduction of FAME-III during the interim budget 2024-25, the union ministry did not make any such announcement. In fact, during the interim budget, the government reduced budgetary allocation on this EV demand incentive scheme by a little over 44% to INR 2,671.33 Cr for FY25.

However, the Centre allocated INR 500 Cr under a new Electric Mobility Promotion Scheme 2024 to support EV adoption for four months – April to July. Of the total, INR 493.55 Cr was earmarked for subsidies and incentives, while the remaining INR 6.45 Cr was set aside for information, education and communication activities.

While there have been numerous arguments for and against the need for demand incentives for the EV industry now, given the ecosystem has matured over the last few years, former CEO of NITI Aayog and current G20 Sherpa for India, Amitabh Kant, recently told Inc42 that EV subsidies were required till 2030.

“If we want to achieve the EV30@30 vision, we have to ensure FAME-III policy consistency,” Kant said.

The sales of EVs have jumped sharply over the last few years, with two- and three-wheelers witnessing most of the growth helped by government incentives.

In 2022, total EV registrations grew to 10.25 Lakh units from 3.31 Lakh units a year ago.

In 2023, the number stood at 15.32 units. This year, India has already seen registrations of almost 8 Lakh EVs, as per Vahan data.

The post FAME-III Likely To Be Unveiled On Budget Day With INR 10,000 Cr Outlay appeared first on Inc42 Media.

Just a day after Hero MotoCorp picked up an additional 2.2% stake in two-wheeler electric vehicle (EV) maker Ather Energy in a secondary transaction, it has now reportedly emerged that Flipkart cofounder Sachin Bansal was one the one who offloaded the stake. 

As per Economic Times, Bansal exited Ather by selling his remaining 7.5% shareholding in the EV major. While Hero MotoCorp lapped up a 2.2% stake for INR 124 Cr, the remaining 5.3% was sold to Zerodha cofounder Nikhil Kamath.

A rough calculation puts the size of Kamath’s purchase at around INR 282 Cr as per the inferred valuation of INR 5,636 Cr from the latest stake acquisition by Hero MotoCorp. 

As per the report, Bansal was one of the first investors in Ather and had invested nearly INR 400 Cr in the EV maker since 2014. 

Inc42 has reached out to Ather Energy, Sachin Bansal and Nikhil Kamath for a comment on the story. Hero MotoCorp could not be reached for a comment. This story will be updated with their response when it is received. 

This comes a few weeks after reports first surfaced that Sachin Bansal had divested a significant portion of his shares to Kamath. At the time, it was also reported that  Ather Energy was seeking substantial funding through a combination of primary and secondary share sales.

Post the 2.2% stake acquisition deal, Hero MotoCorp will hold about 40% of the EV startup’s total shareholding. In its filing with the BSE announcing the deal, Hero MotoCorp also said that Ather’s turnover stood at INR 1,753.8 in the fiscal year 2023-24 (FY24), down 1.5% from INR 1,780.9 Cr reported in the year-ago period.

The fresh fundraise came just days after Ather Energy’s board approved plans to raise INR 286.5 Cr in a mix of equity and debt. In September 2023, the EV maker also bagged INR 900 Cr from existing shareholders Hero MotoCorp and GIC through a rights issue.

Founded in 2013 by Swapnil Jain and Tarun Mehta, Ather Energy is a major player in the Indian electric two-wheeler market. It designs, manufactures and services electric two wheelers. It also operates its own charging infrastructure and is involved in storage, distribution and management of electric power and other ancillary services.

The startup’s net loss surged 150% to INR 864.5 Cr in FY23 as against INR 344.1 Cr in the previous year. Meanwhile, operating revenue jumped 4.3X year-on-year (YoY) to INR 1,783.6 Cr during the year under review.

The post Sachin Bansal Exits Ather, Sells Stake To Hero MotoCorp & Nikhil Kamath appeared first on Inc42 Media.

Hero MotoCorp-backed electric two-wheeler startup Ather Energy’s turnover stood at INR 1,753.8 Cr in the year ended March 31, 2024 (FY24), a decline of 1.5% from INR 1,780.9 Cr reported in the year-ago period, as per Hero MotoCorp’s exchange filings. 

It must be noted that automotive giant Hero MotoCorp announced an additional 2.2% stake acquisition in Ather for INR 124 Cr on Thursday (June 6). The company’s disclosure also mentioned Ather’s turnover.

The decline in the EV startup’s turnover in the last fiscal year is in stark contrast to the 336% year-on-year (YoY) jump it witnessed in FY23 from INR 408.5 Cr in FY22.

Ather reported a 4.3X jump in its operating revenue to INR 1,783.6 Cr in FY23 from INR 408.5 Cr in the year before. 

Although turnover and operating revenue are often used interchangeably, there might be small differences in numbers while accounting. Hero MotoCorp did not provide Ather’s operating revenue or any other financial metrics in its filing.

Founded in 2013 by Swapnil Jain and Tarun Mehta, Ather is among the top players in the Indian electric two-wheeler market. From designing and manufacturing of vehicles and batteries to establishing its own charging infrastructure, Ather has created a huge network of its products and services over the years. It earns a majority of its revenue from the sales of escooters.

Ather competes with Bhavish Aggarwal-led Ola Electric, automotive giants TVS Motor, Bajaj, Hero MotoCorp, among others.

After building its market on its 450 series of escooters, Ather recently launched a family escooter series Rizta and also forayed into the smart helmet category.

Interestingly, the decline in Ather’s turnover came despite its total vehicle registrations rising to 1.09 Lakh units in FY24 from 76,941 units in FY23, as per Vahan data. This decline in turnover could likely be because of Ather reducing its vehicle price.

Amid rising competition from Ola Electric and TVS Motor, Ather slashed the price of its 450S escooter variant by INR 20,000 last fiscal year to grow sales.

The EV startup’s net loss widened over 150% YoY to INR 864.5 Cr in FY23.

The post Ather’s FY24 Turnover Sees Marginal YoY Decline Despite Rise In EV Sales appeared first on Inc42 Media.

Auto giant Hero MotoCorp is acquiring an additional 2.2% stake in two-wheeler electric vehicle (EV) startup Ather Energy for INR 124 Cr in a secondary transaction. 

This translates into a valuation of INR 5,635 Cr (about $675 Mn) for Ather Energy. This is lower than the reported $750 Mn valuation the EV startup got during its Series E round in May 2022.

“Investment is being made in the form of purchase of additional shares from an existing shareholder of Ather Energy for acquisition of up to 2.2% shares (on a fully diluted basis),” Hero MotoCorp said in an exchange filing. 

The auto major said it will purchase the share from an existing investor of Ather Energy. 

This comes six months after Pawan Munjal-led Hero MotoCorp said it would buy an additional 3% stake in the EV startup for INR 140 Cr. At that time, the company said that the 3% stake would increase Hero MotoCorp’s shareholding in Ather Energy to 39.7%. 

The fresh fundraise also comes at a time when the startup has been raising back to back rounds. Last week, Inc42 reported that Ather Energy’s board approved its plans to raise INR 286.5 Cr in a mix of equity and debt.

Prior to that in September last year, Ather secured INR 900 Cr from existing shareholders Hero MotoCorp and GIC through a rights issue.

Founded in 2013 by Swapnil Jain and Tarun Mehta, Ather Energy is a major player in the Indian electric two-wheeler market. It designs, manufactures and services electric two wheelers. It also operates its own charging infrastructure and is involved in storage, distribution and management of electric power and other ancillary services.

As per the exchange filing, Ather Energy’s turnover stood at INR 1,753.8 Cr during the financial year 2023-24 (FY24). 

The startup clocked a net loss of INR 864.5 Cr in the financial year 2022-23 (FY23), up 150% from INR 344.1 Cr in the previous year. Meanwhile, operating revenue jumped 4.3X to INR 1,783.6 Cr during the year under review from INR 408.5 Cr in FY22.

Ather Energy is also reportedly eyeing a listing on the bourses as soon as the second half of 2024. It is said to be mulling raising $400 Mn through the public listing at a valuation of $2 Bn.

The post Hero MotoCorp To Buy Additional 2.2% Stake In Ather For INR 124 Cr In A Secondary Deal appeared first on Inc42 Media.

Electric vehicle (EV) startup Ather Energy is all set to raise INR 286.5 Cr in a mix of equity and debt. 

The Bengaluru-based startup’s board approved a proposal to raise an equity capital of INR 86.6 Cr from its founders – Tarun Mehta and Swapnil Jain – by issuing 74,148 Series F compulsory convertible preference shares.

Additionally, the electric two-wheeler startup’s board also approved raising INR 200 Cr of debt funding from Stride Ventures by issuing up to 20,000 non-convertible debentures.

The development was first reported by Entrackr.

The fundraise comes months after Hero MotoCorp said it would acquire an additional 3% stake in Ather for up to INR 140 Cr ($16.8 Mn). Earlier in September last year, Ather secured INR 900 Cr from existing shareholders Hero MotoCorp and GIC through a rights issue.

It was also reported in April this year that the EV manufacturer was in talks with existing investors to raise $75-90 Mn.

Earlier this year, reports suggested that existing investor Sachin Bansal had sold a significant portion of his shares in Ather Energy to Zerodha cofounder Nikhil Kamath.

Meanwhile, the filings also showed that the board of directors of Ather Energy approved the appointment of Kaushik Dutta as an independent director of the company for a five-year term, effective May 6, 2024.

Dutta is the founding co-director of non-profit Thought Arbitrage Research Institute and also a fellow member of the Institute of Chartered Accountants.

Currently, Dutta serves as the chairman of Zomato and, in the past, he has worked with IICA of the Ministry of Corporate Affairs, PricewaterhouseCoopers and Global Capital Markets among others.

Founded in 2013, Ather Energy is a major player in the Indian electric two-wheeler market. The startup recorded 4,052 units of two-wheeler EV registrations in April.

As per media reports, the startup is also eyeing a public listing, which can take place as soon as in the second half of 2024. Ather is said to be looking to raise as much as $400 Mn through a share sale at a valuation of $2 Bn.

The startup reported a 150% rise in its net loss to INR 864.5 Cr in the financial year 2022-23 (FY23) from INR 344.1 Cr in the previous year. Revenue from operations jumped 4.3X to INR 1,783.6 Cr during the year under review from INR 408.5 Cr in FY22.

The post Ather To Raise INR 286.5 Cr In Equity & Debt, Cofounders To Infuse INR 86.5 Cr appeared first on Inc42 Media.

Delhi NCR-based EV fleet management startup Zypp Electric has raised INR 115.7 Cr or $14 Mn in a fresh round of investment from Japanese energy giant ENEOS. As per the regulatory filings, the startup is receiving the investment from ENEOS Oil & Energy Pte Ltd, a subsidiary of the group.

This is also ENEOS’ first investment in an Indian startup. 

As per the document, the startup is raising the fresh capital by allotting 1,372 Series C compulsory convertible preference shares to ENEOS.  This capital infusion seems to be part of a larger Series C round being raised by Zypp, as per sources.

As per Inc42’s estimates, the startup is raising fresh funding at a valuation of around $280 Mn, almost double the $175 Mn valuation of its previous funding round. 

A query mail sent to Zypp Electric yesterday, didn’t elicit any response at the time of publishing the story. 

Earlier, Economic Times reported that the startup is raising around $40 Mn in Series C funding, which will be led by Silicon Valley-based Tribe Capital. 

Founded in 2017 by Akash Gupta and Rashi Agarwal, Zypp Electric provides electric scooters to local merchants and ecommerce companies for last-mile deliveries. The startup counts the likes of Swiggy, Zepto, Flipkart, Rapido, Blinkit, Zomato, Uber, and Amazon among its clients.

The startup claims to have an electric fleet of over 20,000 EV scooters and is operational in Delhi NCR, Bengaluru, and has also forayed into Hyderabad and Mumbai. 

To further solidify its presence, last year, Zypp Electric forayed into three wheeler cargo business and now claims to have over 750 three wheeler EVs. 

In FY23, on a standalone basis, the startup’s revenue from operations jumped by 5X to INR 109 Cr, from INR 21.4 Cr in the previous year. However, the startup’s net loss surged by 2X to INR 40.5 Cr in FY23, from INR 15.2 Cr. 

Zypp Electric claims to have seen a 3X jump in revenue in the financial year ending on March 31, 2024 (FY24), but the company has not disclosed the audited financials. . 

Till date, the startup has raised around $75 Mn in multiple funding rounds and counts Gogoro, Venture Catalysts, LetsVenture, IAN, Ivy Growth, We Founder Circle, among others its backers. 

In February of last year, the startup had last bagged $25 Mn in a mix of debt and equity in its Series B funding. 

Zypp competes against the likes of MoEving, Baaz Bikes, Yulu, Zen Mobility, Euler Motors, among others.

The post Exclusive: Zypp Electric Bags $14 Mn From Energy Giant ENEOS appeared first on Inc42 Media.

The government is reportedly considering restoring financial support to three two-wheeler electric makers, including Revolt Motors, Greaves Electric Mobility and Amo Mobility under its Electric Mobility Promotion Scheme 2024.

However, it may bar others, including Hero Electric, Okinawa Autotech and Benling India from all government schemes in future, ET reported. 

Of the 13 companies that the Ministry of Heavy Industries investigated in 2022, Hero Electric, Okinawa Autotech, Ampere Vehicles, Benling India, Amo Mobility, Lohia Auto and Revolt were found to violate the FAME II norms. Following this, the government halted the subsidies of these companies. 

The Centre has allocated INR 500 Cr for the new Electric Mobility Promotion Scheme 2024, after it granted a four-month extension to the FAME II scheme in March with an additional corpus of INR 500 Cr. The scheme was to reach its expiry on March 31, 2024. 

Among these companies, Revolt, Greaves and Amo have reportedly paid back INR 170 Cr for wrongfully claimed subsidies to the government. It is pertinent to note that the Centre issued notices around the recovery of INR 469 Cr subsidy availed by the defaulted companies between 2020 to 2023.

Defying the government’s claim, Hero, Okinawa and Benling, in turn, challenged the recovery notices.

Citing Okinawa’s spokesperson, ET reported, “We have filed a writ petition in Delhi High Court to recover our outstanding FAME II dues of upwards INR 425 Cr and our case is subjudice. Okinawa Autotech always has been compliant with the scheme guidelines and the same was observed by MHI’s committee headed by Joint Secretary, Mukta Shekhar.”

Meanwhile, not only Joint Secretary Mukta Shekhar’s report was rejected by the Centre, but it also ordered a new investigation into the FAME scheme, as per the report. Moreover, the latest investigation did not agree with the findings of the Shekhar report.

Earlier in March, it was reported that the Centre was considering legal action against Hero Electric, Okinawa Autotech and Benling India. As per the ministry’s estimates, an amount worth INR 155 Cr, INR 125 Cr and INR 50 Cr was to be recovered from Hero Electric, Okinawa and Benling respectively.

Under the FAME II scheme, domestic EV makers can claim a subsidy from the government of up to 40% discount on their vehicles’ cost. But they are also mandated to ensure that at least 50% of products use locally manufactured components.

FAME II was introduced in 2019 with an initial outlay of INT 10,000 Cr for supporting the adoption of EVs in the country. In February this year, the Finance Ministry approved an additional INR 1,500 Cr for the second phase of FAME-II.

This development comes at a time when the overall growth momentum is with the EV industry. Not to mention, aiming to make India a manufacturing hub for EV makers, the government in March also introduced a new EV policy that offers a reduced tariff on the import of EVs.

As per Inc42’s report, in 2023 EV sales surpassed the 1.5 Mn mark, dominated by two-wheelers and three-wheelers.

Last month the electric two-wheeler registrations in the country fell to almost an eight-month low mark at 64,013 units in April, after it surpassed 1 lakh registrations in March.

The post Govt May Restore EV Subsidies For Revolt Motors, Greaves And Amo Mobility: Report appeared first on Inc42 Media.

Even as OEMs and automotive giants have bemoaned the lack of clarity in India’s new policy to boost domestic electric vehicles (EV) manufacturing, government officials have reportedly given some indication on the potential focus areas for EV makers. 

In particular, investments made for creating physical infrastructure such as machinery and plants, charging stations and other assets will also qualify for incentives, unnamed officials were quoted as saying by ET.

It is pertinent to mention here that the government announced the new EV policy called the Scheme for Manufacturing of Electric Cars in March.

“Qualified investment will be money spent on setting up plant and machinery, charging infrastructure, and also assets owned by the company which are not on its premises,” ET quoted government officials as saying.

The report also added that up to 10% of the building cost can also be billed as an investment towards setting up EV-making capacity. 

This development follows the government’s consultation with the industry stakeholders, including representatives from global companies like Tesla, VinFast, Hyundai, Kia, Volkswagen, BMW and Audi as well as Indian carmakers like Maruti Suzuki, Tata and Mahindra & Mahindra.

The new EV policy allows reduced import taxes on original equipment manufacturers that commit to investing at least $500 Mn (INR 4,150 Cr) and establishing a manufacturing plant within three years. However, there was confusion about what such an investment needs to entail. 

The centre is also said to be soon inviting applications from global EV players to avail the benefits of EV policy. 

The ET report also claims that previous investments made by manufacturers won’t be considered under the new policy. This is pertinent because Vietnamese EV maker VinFast had enquired about the existing investments made by the company in India. According to officials quoted by the report, existing investments and ventures won’t be considered for the import duty exemption. 

In January, VinFast inked a Memorandum of Understanding (MoU) with the Tamil Nadu government to establish an EV manufacturing facility in the state. Under the pact, VinFast has announced an initial investment of $500 Mn in the first phase of the project which will span a period of five years. 

It is anticipated that the centre will allow EV players to apply for approvals under the new policy from July 31 or later.

The post Under New EV Policy, Investments In Infrastructure Eligible For Incentives: Report appeared first on Inc42 Media.