Electric two-wheeler manufacturers are expressing grave apprehensions regarding the recently unveiled Electric Mobility Promotion Scheme (EMPS) 2024, projecting a substantial blow of over Rs 300 crore to their industry. The Ministry of Heavy Industries (MHI) unveiled the operational guidelines for EMPS 2024, heralding a significant shift from the erstwhile Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-II) scheme, with an allocated budget of Rs 500 crore for the initial four months commencing April 1.
The cornerstone of concern among electric two-wheeler manufacturers stems from the altered subsidy structure introduced under the EMPS 2024. Previously enjoying a more favorable subsidy scheme, these manufacturers now face a halving of subsidies to Rs 5,000 per kilowatt-hour, a move that imposes a stringent cap on their financial incentives.
This abrupt revision in subsidy policy has sent shockwaves through the electric two-wheeler sector, prompting stakeholders to voice their dismay over the potential ramifications. With the reduction in subsidies, manufacturers fear a significant dent in their revenues, posing a considerable threat to the growth trajectory of the industry.
The Ministry’s decision to revamp the subsidy framework under EMPS 2024 reflects a broader governmental strategy aimed at recalibrating incentives to align with evolving market dynamics and technological advancements in the electric mobility sector. However, the suddenness and magnitude of the subsidy reduction have caught industry players off guard, eliciting calls for a more gradual transition to the new scheme.
Industry experts emphasize the need for policymakers to engage in extensive consultations with stakeholders to navigate the transition effectively. They argue that a collaborative approach would enable the formulation of policies that strike a balance between incentivizing electric vehicle adoption and safeguarding the interests of manufacturers.
Furthermore, concerns have been raised regarding the timing of the scheme’s implementation, coinciding with a period of economic uncertainty exacerbated by global supply chain disruptions and fluctuating commodity prices. Electric two-wheeler manufacturers are apprehensive about their ability to absorb the financial impact of reduced subsidies amidst these challenging market conditions.
In response to mounting apprehensions within the industry, stakeholders are calling for a reevaluation of the subsidy structure to mitigate adverse effects on manufacturers. Suggestions include revisiting the subsidy cap and exploring alternative mechanisms to support the transition to electric mobility without unduly burdening industry players.
Amidst the uncertainty surrounding EMPS 2024, electric two-wheeler manufacturers are urged to diversify their strategies and explore avenues for cost optimization and value addition. Embracing innovation and efficiency gains will be crucial in navigating the evolving regulatory landscape and sustaining competitiveness in the electric mobility market.
As the electric two-wheeler industry grapples with the implications of EMPS 2024, stakeholders remain hopeful for constructive dialogue and proactive measures to address concerns and foster a conducive environment for sustainable growth and innovation.
