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.
Collision course: Low-cost versus high-speed as FAME-II splinters EV scooter market
With government policy going against Hero Electric’s low-cost, low-speed vision for India’s electric scooter future, high-end OEMs like Ather hope to cash in
FAME-II, the Indian government’s EV policy, has caused a sparring match between price and performance
Hero Electric wants to create a new, low-end market, while younger rivals like Ather are bullish about matching the performance of mainstream petrol scooters
At a price point of Rs 1.3 lakh, Ather is still too expensive to go mainstream. At a top speed of 25 km/hour, Hero is too slow
As the two strategies clash, EV customers remain unconvinced about both