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Hero Electric raises Rs 160 Cr; questions about India’s EV future

Hero Electric, the electric bike manufacturer, has raised Rs 160 crore from Alpha Capital Advisors, for a “significant” minority stake. The company will use the funding to diversify its products, acquire new tech, and on research and development. Hero Electric is also planning to launch products in a phased manner by adding to its manufacturing capacity in the next 5 years. Hero claims to have 45% of India’s electric bike market, and has launched 15 electric vehicles (EVs) in the last 10 years.

State’s EV policies

  • Earlier today, the Kerala state government signed an MoU with World Resources Institute to implement an electric vehicles policy. The state is looking at getting “adequate” power availability, charging networks, and a “favourable” power tariff according to the report. Kerala is looking to get 1 million EVs on the road by 2022; and a pilot fleet of 200,000 bikes, 50,000 3-wheelers, 1000 goods carriers, 3,000 buses and 100 ferry boats by 2020.
  • In September 2017, Karnataka approved an “Electric Vehicle and Energy Storage Policy 2017” to produce alternative fuel vehicles, reduce fossil fuel dependency and reduce pollution in the state.

FAME, EVs and the future

While India does not have an EV policy in place yet, in August this year, Economic Times reported that the government was mulling over one. A programme called “Faster Adoption and Manufacturing of Electric and Hybrid Vehicles” aka FAME was started in 2015 under the National Electric Mobility Mission Plan (NEMMP – pdf) 2020, which, by the government’s own wording is “ambitious”. Amongst its “ambitions” is achieving sales of 6-7 million of hybrid and electric vehicles year on year from 2020, driven by fiscal and monetary incentives. FAME was launched with an “initial outlay” of Rs 75 crore. According to PIB, this amount was fully utilised, while for the FY 2016-17, Rs 91 crore was utilised from the budget allocation of Rs 122.90 crore.

The government said that under FAME,

  • 99,000 hybrid/electric vehicles (xEVs) were given direct support by way of demand incentives since the launch on 1st April 2015.
  • Approved pilot projects, charging infrastructure projects and technological development projects aggregating to nearly Rs 155 crore.

The scheme had been extended till September this year. Despite this, there are serious questions about when, preparedness, and if whether, an EV policy will be implemented at all.

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