A day after
Bajaj Auto and TVS Motor voiced concerns over the government's electric vehicle-related policies, sources told CNBC-TV18 that no decision has been taken on the Niti Aayog proposal to phase out 2-and 3-wheelers.
As per the government sources, who spoke on the condition of anonymity, so far the Centre has not prepared a draft notification for public comments.
The National Mission on Transformative Mobility and Battery Storage, led by Niti Aayog, recently shared minutes of meetings with all ministries working on the Electric Vehicle roadmap.
According to the minutes, the Niti Aayog is strongly considering to phase out internal combustion engines for 3-wheelers by 2023 and 2-wheelers by 2025, issue a feebate policy and tighten corporate average fuel efficiency norms.
The Centre is also considering a proposal which, if approved, would make it mandatory for cab aggregators to have electric vehicles as 40 percent of their fleet by 2026, said the sources.
Rajan Wadhera, the President or Society of Indian Automobile Manufacturers, warned that any move to hastily phase out two-and-three-wheeler internal combustion engines would be impractical as the industry is yet to even recover the Rs 70,000-80,000 crore investment made towards the transition from BS-IV to BS-VI.
"Such unrealistic expectations and policies would only adversely affect the world No 1 two/three-wheeler industry but may not help in making EVs acceptable to the customer and the market," Wadhera said.
Industry sources also said that none of the major 2-wheeler makers have mass market product available so far and the government is not even looking at what the customer preference would be and what is the likely demand for such vehicles.
Sources also added that this move may impact new launches and planned investments as well.
There is also a view in the government that the deadline suggested by Niti Aayog would put too much pressure on the auto industry, which is going through a rough patch and probably a phase-out for 3-wheelers by 2026 and 2-wheelers under 150cc by 2028 would be better.
While no decision would be taken without stakeholder consultation, the Niti Ayog proposal would be the guiding principle, people familiar with the development told CNBC-TV18.
"If we are serious about the transition to electric then this is the only way to do so, however, the deadline can be delayed in consultation with the industry", said one of the people cited above.
The Centre believes it is important to target 2-wheelers as they comprise 70 percent of the automobiles on the road and 3-wheelers are used by commuters for short distances.
While the government sources may have played down the Niti Aayog proposal, the industry is taking all reports very seriously.
Pawan Munjal, Chairman of Hero MotoCorp, said, "Coming close on the heels of the implementation of the BS-VI norms in 2020, this move could have serious implications on the industry and the millions who are dependent on it. Therefore, we propose a more cautious, clear and realistic roadmap towards the adoption of EVs. The scale and timing of the adoption need prudent deliberations".
Rajiv Bajaj, Managing Director of Bajaj Auto, also called the move 'ill-timed' and 'impractical'.
"An appropriate middle path to my mind would be in the first phase to target such a changeover through Corporate Average Fuel Efficiency (CAFÉ) norms/electric vehicles for all vehicle categories from a particular date such as 2023 or 2025 starting with the most polluted cities of India," Bajaj said on Wednesday.
Venu Srinivasan, Chairman of TVS Motor, also called for seamless and gradual transition in order to avoid collateral damage.
As per the officials, who spoke to CNBC TV18 on condition of anonymity, the Niti Ayog proposal has caused panic among Original equipment manufacturers."This move will need widespread consultation as at the end of the day a two-wheeler is an
aam admi ki gaadi and a necessity. We do not want the industry to be harmed at a time when the sales are down", said one of the officials, adding that Union Minister Nitin Gadkari was keen on a detailed debate among all stakeholders before deciding on any future EV/mobility policy.