New Delhi – Ather Energy’s Chief Business Officer, Ravneet S Phokela, emphasizes the need for policy predictability to encourage investment in the electric two-wheeler sector. Ather Energy, a significant investor in Hero MotoCorp, envisions complete electrification of the domestic two-wheeler market by 2030 and is gearing up to export its products to markets resembling 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 satisfaction with the government’s support and the current subsidy levels. However, he hopes for an extension of the scheme for an additional three to five years to accelerate the adoption of electric vehicles.

Phokela outlines two critical requirements for the next iteration, FAME-III: extending the time period and ensuring policy predictability. He emphasizes that unpredictability is detrimental to businesses as their plans are contingent on subsidy assumptions. Any changes in these assumptions can disrupt investment decisions.

Ather Energy had previously planned to establish a third manufacturing plant with an annual production capacity of one million units but has yet to finalize a location. Phokela stresses the importance of maintaining a stable subsidy structure to facilitate long-term investments.

Regarding the subsidy levels, Phokela expresses contentment with the current levels (around Rs 21,400 per vehicle) and does not recommend raising them further, as this can artificially inflate market prices. He believes that the market should not rely on artificial pricing and should instead seek sustainability through market-driven pricing.

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When discussing the duration of electric two-wheeler subsidies, Phokela suggests a span of three to five years but underscores the significance of longevity over increased yearly subsidies. He proposes spreading the finite subsidy budget over several years rather than exhausting it in a single year.

Ather Energy is also open to the idea of gradually reducing the subsidy structure over time. Notably, the subsidy for electric two-wheelers under the FAME-II scheme was reduced from June 1 this year. The heavy industries ministry capped incentives for electric two-wheelers at 15 percent of the ex-factory price, down from 40 percent, and set a demand incentive of Rs 10,000 per kWh.

Phokela believes that by 2030, India will achieve complete electrification of the two-wheeler market, with an estimated 50-55 percent penetration by 2025.

Regarding Ather’s export plans, Phokela acknowledges interest from overseas markets but mentions that the company has focused on the domestic market until now. However, they plan to commence exports soon, with a potential announcement in the next two months. The company is eyeing markets similar to India for its initial foray into international markets.

Ather Energy’s advocacy for policy predictability and sustainable subsidy structures reflects the growing importance of stable regulatory frameworks in promoting electric mobility and attracting investments in the sector.