After declining about 89% during FY10, electric two-wheelers failed to get a single customer in April 2010, raising questions about their future
According to the Society of Indian Automobile Manufacturers (SIAM), electric two-wheelers are dying a slow death. During April 2010, not a single electric two-wheeler unit was sold in comparison to 594 units sold last year.
Last month, Naveen Munjal, president of the Society of Manufacturers of Electric Vehicles (SMEV), had said that the state of affairs of the electric vehicles (EVs) industry is very poor. "The industry will not survive very long, unless there is government intervention. We need government support," he said.
Sales of electric two-wheelers have been on a downward journey for the past few years. During FY10, sales for electric two-wheeler tumbled 89% to 3,001 units from 26,445 units a year ago.
According to a PTI report, the Indian government has been contemplating a policy for EVs in the country, for which an inter-ministerial group was conducting a feasibility study.
Currently, 4% excise duty is levied on production of EVs, while the components for EVs come under 10% excise duty net, which the manufacturers are urging the government to waive. The import of EVs attracts 14% duty and there is a 4% duty for import of parts.
On the sales front, while Delhi, Rajasthan, Uttarakhand and Lakshadweep do not levy any sales tax, other States charge 4%-15% sales tax or value-added tax (VAT).
The industry can create a niche for itself in three to five years, but with government help, it can be done much faster, Mr Munjal added.
The size of the EV industry is pegged at about 85,000 units annually. The market is dominated by Electrotherm India Ltd and TVS Motor Co Ltd. According to media reports, Mahindra and Mahindra, the country's largest utility vehicles maker, is also planning to launch an electric variant of its current scooters, ‘Rodeo’, ‘Duro’ and ‘Flyte’.