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Most of our products to have 90% localisation by March, says Hero Electric CEO

Updated : August 27, 2019 06:58 PM IST

As India drives its electric vehicle policy through a subsidy programme that encourages local production, its hasty implementation, frequent changes, and unavailability of finance for the vehicles have been weighing on the country’s EV industry.

In March, the government announced an outlay of Rs 10,000 crore towards subsidies to incentivise primarily electric two-wheelers and three-wheelers over the next three years, under its FAME – II (Faster Adoption and Manufacturing of Electric Vehicles in India) scheme. But to avail of the subsidies – manufacturers had to have about half of the components that went into the vehicles sourced from local suppliers. The result? Few manufacturers were able to avail of the scheme’s benefits, and many had to halt production and scramble to get their products recertified on a tight deadline.

In an interview with CNBC-TV18, Sohinder Gill, CEO, Hero Electric and Director General of Society of Manufacturers of Electric Vehicles (SMEV) talked about the challenges faced by the industry players.

"Although we have started working on sourcing components and localisation,  we are nowhere near the strict target that government has set because localisation of automotive is not an easy thing and if government expects us to do it in three months it would be a shoddy job and we are not going to do it. So, on one hand we are pushing the government and they are agreeing to some deviation on localisation and on other hand, we are accelerating localisation. By this February-March, most of our products will have 90 percent localisation," he said.

With regards to finance for electric vehicles, he said there is a huge apprehension on the financing side. “I don’t know why banks are so wary or afraid of end of life, resale values when companies are ready to pitch in and share the losses or delinquencies,” said Gill.
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