Hero Electric–India’s largest manufacturer of electric two-wheelers by volumes sold—had a rather unpleasant surprise waiting for it in the new year. A report published on 2 January claimed that the OEM (original equipment manufacturer) has all but halted its Rs. 700 crore ($97.4 million) investment in ramping up production capacity from 100,000 units per year to 500,000. The report suggested that with the introduction of phase II of the Faster Adoption and Manufacture of (Hybrid &) Electric Vehicles (FAME-II) policy, the Indian government’s flagship electric vehicle (EV) policy, Hero’s sales had taken a huge hit.

Naveen Munjal, managing director of Hero Electric, outright denied any reports of slowing down. In fact, he claimed the opposite. “This year, we will do more volume than ever before. Almost 30-40% more,” he told The Ken in an interview.

 “We are re-strategising to become subsidy agnostic,” says Munjal, confidently.

Munjal’s positive outlook notwithstanding, FAME-II has caused an unprecedented blood bath in India’s EV two-wheeler space since its announcement in March 2019. It imposed strict conditions around speed, range, and battery size on OEMs looking for a share of the Rs 10,000 crore ($1.4 billion) subsidy pool the policy provided. The policy was meant to catapult the EV sector towards mass adoption. Instead, it brought the space to a grinding halt. Sales plummeted 94% according to the Society of Manufacturers of Electric Vehicles.

No company has been more hurt or more vocal than Hero about FAME-II’s impact on the market. “FAME-II wants to electrify commutes in India. But the policy excludes a majority of the vehicles. Hero is raising a red flag through its public comments,” says Avik Chattopadhyay, a Delhi-based EV industry expert.

According to a report on the policy by ratings agency CRISIL, almost 95% of the low-cost, low-speed EV two-wheelers are not eligible for the subsidy. Hero has at least eight such scooter variants (out of 12) in its stable, alongside smaller, regional players like Ampere, Yo, Avon and Jitender.

“At a minimum top speed of 40 km/hour and a range of 80 km per charge, FAME-II has picked high-speed, high-performance scooters over low-speed ones. They don’t want to clog Indian roads with slow-moving scooters that can only achieve a top speed of 25 km/hour,” said an auto industry lobbyist, who wished not to be named since he’s not authorised to speak with the media.

FAME-II may have Hero in an uncomfortable spot. But it’s created a rather comfortable niche for high-speed, high-performance EV players like Ather, who are pulling the EV market in the opposite direction. If lower prices are Hero’s shield, Ather’s currency comes from its high-performance specs, albeit at a higher price point.


Olina Banerji

Based in Delhi, Olina writes about mega-trends in urban mobility, education, skilling and the environment, with a focus on how institutions and innovations can help cities grow sustainably. She is a graduate of the London School of Economics, and has worked previously with India Today and global non-profit Ashoka.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?


Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750


Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750


Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500


Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120


Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50


Single Story

Instant access to this story for a year along with comment privileges.

$ 20



What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.