- SMEV appealed to a parliamentary panel to release the pending subsidy of ₹1,200 crores set aside for the EV sector.
- The SMEV pointed out that electric two-wheeler sales were unable to reach the targets set by Niti Aayog
- It reasoned that this drop was due to a fall in the working capital of OEMs.
Electric vehicle (EV) industry body Society Of Manufacturers Of Electric Vehicles (SMEV) on Tuesday submitted a written petition to a parliamentary panel, warning that unpaid subsidies were putting financial stress on the EV industry.
In its petition to the Parliamentary Standing Committees on Industry and Estimates, SMEV appealed to the committee to direct the government to release the pending subsidy of ₹1,200 crores set aside for the EV sector which is facing a liquidity crunch.
SMEV wrote that the financial stress in the industry has occurred because the Fame II subsidies have been delayed for more than a year. This is the seventh petition sent by SMEV after the Fame II subsidies were stopped.
“Now that the country is almost ready with the entire supply chain, the only thing holding up the sector is the ₹1,200 crores worth of subsidies that have been withheld leading to a serious liquidity crisis in the industry,” it added.
EV adoption slowdown
Even though the overall Indian EV industry has passed the one-million mark, India’s electric two-wheeler sales totalled 8,46,976 units, falling more than 1.5 lakh short of the one-million target set by Niti Aayog.
The SMEV says that this drop is due to the working capital of the OEMs being squeezed. “For the OEMs that have passed on the subsidies to customers, this delay has hugely squeezed their working capital resulting in a substantial drop in the industry volumes vis-a-vis target. The monies are due as subsidies have not been received as yet by OEMs while they have passed them on to customers. In effect, the Department is in debt to the OEMs,” it wrote.
Pointing to the way forward, SMEV noted that “the need of the hour is for the government and the industry to work together to resolve issues and put India back on track to meet its e-mobility targets.”