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Auto Industry Calls Niti Aayog’s Electric Two-Wheeler Plan Unrealistic

Automakers have asked for wider consultation with the auto industry before setting any kind of targets and timelines.



Hero Honda Motors Ltd. employees work on the production line at the company’s new factory in Haridwar, India. (Photographer: Pankaj Nangia/Bloomberg News)
Hero Honda Motors Ltd. employees work on the production line at the company’s new factory in Haridwar, India. (Photographer: Pankaj Nangia/Bloomberg News)

Niti Aayog’s proposal to turn India’s motorbikes and scooters electric in the next six to eight years is ambitious but impractical, according automakers’ lobby, as it may disrupt the already struggling sector.

The government think tank’s suggestions should have a practical approach, rather than unrealistic expectations, the Society of Indian Automobile Manufacturers said in a statement. It asked for wider consultations with the industry before setting any kind of targets and timelines.

The think tank, chaired by Prime Minister Narendra Modi, is working with several ministries on the policy. The push for electric vehicles comes as India looks to pare reliance on fossil fuels to curb pollution and reduce oil imports.

Two-wheeler makers Bajaj Auto Ltd. and TVS Motor Company Ltd. said that any plan to ban internal combustion engine of three-wheelers and two-wheelers for mass adoption of electric vehicles by forcing “unrealistic” deadline is “ill-timed” and could derail auto manufacturing in the country.

“It may be impractical to target such a scale when none of the stakeholders currently possess any meaningful experience with any of the pieces of the EV puzzle,” Rajiv Bajaj, managing director at Bajaj Auto, said, adding that targeting only two- and three-wheelers but not cars also makes it an incomplete initiative. “It’s ill-timed to target a date so close to BS-VI implementation.”

BS-VI refers to the sixth-stage stricter emission standards that automakers have to adopt by April next year.

“There’s already a huge investment involved with the BS-VI transition to the tune of Rs 70,000-80,000 crore,” Rajan Wadhera, president of SIAM, said. “And even before the investment is recovered, the proposed ban seems to be impractical as well as untimely.”

To be sure, electric vehicle sales account for less than 0.1 percent in the passenger vehicle segment and less than 0.2 percent for the two-wheeler segment, SIAM said in its white paper on electric vehicles. The paper raised concerns regarding scalability of electric vehicles such as affordability gap, lack of consumers’ acceptance, lack of electric vehicle manufacturing, lack of comparable products (especially in the two-wheeler category) and non-existent public charging infrastructure.

Venu Srinivasan, chairman at TVS Motor, said the country needs gradual and seamless adoption of electric vehicles to avoid collateral damage and ensure technology-driven disruption is positive and lasting.

The scale and timing of the adoption need prudent deliberations and we will gladly support all stakeholders in this process

Hero MotoCorp Chairman Pawan Munjal proposed a more cautious, clear and realistic roadmap towards the adoption of EVs. "This move (towards EVs) will be very critical because it impacts an industry that is a significant contributor to the country's GDP and is a large job creator," Munjal was quoted as saying in a PTI report. The scale and timing of the adoption need prudent deliberations and we will gladly support all stakeholders in this process, he said.

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