Hero Electric stalls Rs 700 crore investment

New Delhi: Leading electric two-wheeler maker Hero Electric has put on hold investment of up to Rs 700 crore by a year with the sector taking a nosedive as FAME II, scheme aimed to promote electric vehicles, has failed to deliver, according to a top company official.

Calling for a complete revamp of the policy, the company wants the government to include low speed two-wheelers for subsidy arguing that for mass adoption of electric vehicles (EVs) in India these cost effective vehicles are critical. "From an industry standpoint, there was a certain trajectory which was going on when we had FAME I. With the coming in of FAME II, whatever be the logic and reason, the manner in which FAME II was introduced, the whole industry took a downturn and now the industry is recovering from that," Hero Electric Managing Director Naveen Munjal said.

As per Society of Manufacturers of Electric Vehicle (SMEV), sales of FAME II qualified electric two-wheelers in April-December 2019 period stood at just 3,000 units as against 48,671 units in the year-ago period when FAME I was in place, a decline of 93.84 per cent.

Under FAME I, low speed two-wheelers with top speed of up to 25km/hr had qualified for incentives of up to Rs 17,000 and Rs 22,000 for high speed ones.