New Delhi : Sales of electric vehicles are expected to increase in India. Although, subsidy is given by the government on the manufacture and purchase of electric vehicles, but it is also being told that whether the subsidy is received from the government or not, the sale of electric vehicles will accelerate. Sanjay Kapoor, President, Automotive Component Manufacturers Association (ACMA) said that the sales of electric vehicles in the local market will continue to grow and the slowdown in the sector during the last two months following the incentives under FAME-TO (Faster Adoption and Manufacturing of Electric Vehicles) Despite this, the sales of electric vehicles have increased.
PLI scheme prepared roadmap
Sanjay Kapoor, President, ACMA, said that electric vehicles will continue to grow in a cost-based market with a strong focus on localization coupled with advanced technologies. He said that if Chinese suppliers of American electric vehicle maker Tesla set up in India, these investments in developmental capabilities will help mitigate the risks to the electric vehicle industry. He said that the Production Linked Incentive (PLI) scheme has contributed to address the cost concerns and laid out a roadmap for furthering the activity of the industry.
Government reduced incentive amount
According to a media report, from June 1, 2023, the central government has reduced the incentive given on electric two-wheelers from Rs 15,000 per unit to about Rs 10,000. This step of the government has increased the cost for the end consumer. However, after this action taken by the government, there has been a decline in the sales of electric two-wheelers in India. It has been told in the report that in the month of July this year, 56,000 units of electric two-wheelers were sold, while in June about 44,000 units were sold. However, around 60,000 electric two-wheelers were sold in the same period last year.
Increase in revenue of component manufacturers
The report said that the total revenue of component manufacturers increased to 2.7 per cent during the last financial year, which was less than one per cent during the 2021-22 financial year. Despite the pressure seen on the sales of electric two-wheelers at this time, the sales of electric vehicles in India will continue to grow. ACMA President Sanjay Kapoor further said that the focus on localization on the part of the auto industry and the announcement of an incentive amount of Rs 44,038 crore by the government under the PLI scheme for advanced chemical cells, and auto component manufacturers, has given India a Will help to establish as a developed nation.
Auto component makers working on China plus one strategy
He said that in the last financial year, auto component makers had to bear losses of about $ 200 million, which was less than $ 2.5 billion in the year 2019, five years ago. He said that automakers around the world have started working on the China Plus One strategy to de-risk the supply chain after the pandemic. Sourcing of components from India is on the rise. Manufacturers globally have started to recognize the potential of adopting the technology.
Increase in auto component exports
He further said that in the year 2022-23, the export of auto components increased by five percent to reach a record $ 20.1 billion. However, an eight percent increase in shipments was recorded in North America during this period. Similarly, in Europe and Asian countries, it increased by three and four percent respectively. He said that North America is the largest overseas market for Indian component makers, which accounted for about 32 per cent of total exports in the last financial year. During this period, imports increased by about 11 percent. However, a decline has been registered during the last five years. He said that China’s dominance over imports continues and it cannot end overnight, but we have to continue investing. Mutual cooperation will have to be considered to end China’s monopoly.