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Hero, Bajaj and TVS hit out against Niti Aayog’s proposal for only electric two-wheelers from 2025: report

Hero MotoCorp, Bajaj Auto and TVS Motors, India’s biggest two-wheeler manufacturers, have hit out against Niti Aayog’s proposal that all scooters and motorbikes with an engine capacity of more than 150cc must run on electric power from 2025, reports the Financial Express. TVS argued that the transition from conventional to electric two-wheelers is “not like Aadhaar, not software and print cards” since it will require migration to a completely new supply chain. Meanwhile, Hero MotoCorp said that Niti Aayog’s approach to electrification of two wheelers was “deeply concerning” and could potentially “jeopardise the industry”. Bajaj Auto said that such a transition was “completely uncalled for”. MediaNama has reached out to Hero MotorCorp, Bajaj Auto, Ather and Okinawa for comment. TVS has refused to comment on the development.

“The kind of participation that we had from the industry goes to show how forward thinking we are unlike many western countries where electric has been vehemently opposed by legacy players,” Ather said in their reply to an email from MediaNama. Ather is among the few Indian companies that manufacture only electric two-wheelers.

Manufacturers’ arguments against Niti Aayog’s approach

Hero: Ideal to have a healthy mix of policy and a phased approach

Hero said that Niti Aayog’s move comes at a time when two-wheelers manufactured in India will have the cleanest emissions in the world, referring to the BS VI norms, which kick in next April. The firm argued that it would be better to have a healthy mix of policy, market dynamics and customer acceptability instead of imposing EV adoption.

It also said that instead of a one-time solution, it would be better if Niti Aayog looked at a systematic phasing out of conventional vehicles as this would give time to “all parties involved to understand, accept and if required, make course-corrections in their approach towards EVs”.

Bajaj: Impractical and ill-timed

Bajaj Auto had previously said that the think tank’s proposal was “impractical and ill timed” as many stakeholders had no previous experience of making an EV, and because  BS VI implementation was around the corner. It also said that targeting two- and three-wheelers but not cars, etc made this an incomplete initiative.

‘Whole thing not thought through’

TVS argued that the move would not be possible as it was “not thought through”, given that it would affect 20 million vehicles along with $15 billion in sales and 10 lakh employees.

NITI Aayog’s plans to develop EV industry

NITI Aayog recently proposed that only electric vehicles (EV) be sold after 2030, and the government has been chasing the goal of achieving 30% e-mobility in India by then. However, this goal seems unattainable considering India’s lack of charging infrastructure and the high prices of electric vehicles. To achieve the e-mobility goals, NITI Aayog has also proposed doubling the electric three-wheelers subsidy under second phase of Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles (FAME II) to Rs 20,000 per kWh. This will reduce the costs of the vehicles and in turn boost demand.

The government is also planning to introduce a comprehensive scrapping policy and ‘polluter-pays’ model to boost the demand for EVs. The “polluter-pay” model, which was floated by the think tank, involves imposing fines on conventional vehicles and using the money to fund electric vehicles. However, this model was delayed before the Lok Sabha elections as the government felt that it could hurt vehicle owners.

The government is focusing on increasing electric vehicle adoption in the commercial and public transportation space to ensure that more such vehicles are deployed. Reuters recently reported that the government plans to direct taxi aggregators such as Ola and Uber to convert 40% of their fleets to electric vehicles by 2026.

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