Industry divided over sale, registration of EVs without pre-fitted batteries

Society of Manufacturers of Electric Vehicles (SMEV), which has electric two- and three-wheeler makers as majority of its members, said the move to delink batteries from the EVs is a good idea but other steps like reducing GST on batteries from 18 per cent to 5 per cent need to be taken to make these vehicles more attractive for customers.

The government's move to allow sale and registration of electric vehicles without pre-fitted batteries evoked mixed reaction from the EV industry on Thursday, with majority of two-wheeler makers welcoming it while Mahindra Electric said no country in the world allows such a system and the step has not been thought through. Society of Manufacturers of Electric Vehicles (SMEV), which has electric two- and three-wheeler makers as majority of its members, said the move to delink batteries from the EVs is a good idea but other steps like reducing GST on batteries from 18 per cent to 5 per cent need to be taken to make these vehicles more attractive for customers. Ather Energy, Hero Electric, Okinawa and Ampere Electric were unanimous that the government's move will lower the upfront cost that a consumer has to pay and thereby help in popularing EVs. On the other hand, Mahindra Electric, which is mostly into electric three-wheelers and four-wheelers, said this move has not been thought through, with no consultation with the industry and it has created confusion. SMEV Director General Sohinder Gill said the move to delink batteries from EVs is a good idea, but a lot needs to be done before it becomes practically implementable and beneficial to the customers.   "We feel that the announcement should have been made coupled with some other policy measures to make EVs more attractive for the customers as well as for the manufacturers. "For example, announcing reduction of GST on batteries from 18 per cent to 5 per cent, if sold separately and formalizing a mechanism of passing on the FAME subsidy to such EVs as currently subsidy is calculated on the battery power sold along with the vehicle," he added. Gill further said for a B2C customer, the EV will "still have to be purchased along with the battery as there are hardly any battery swapping/rental/leasing business models sufficiently available across India." He, however, added that "it makes good sense in B2B where we can have captive swapping stations and business models for batteries as a service are emerging. We have sought clarifications on various aspects of the policy and hope the government would address them soon." Reacting to the development, Mahindra Electric MD and CEO Mahesh Babu said, "No country in the world allows registration of EV's without battery. We will explain the government that this notification has created confusion." He further said up to the sale of the vehicle, the OEM (original equipment manufacturer) is responsible for the safety of the vehicle. For a vehicle that is tested, manufactured and sold as an integrated unit, the OEM is responsible for the warranty. "Either charging or swapping is post sale charge replenishing methods. Both can exist in the current framework. This move has not been thought through and the industry has not been consulted," Babu added. On the other hand, Ather Energy CEO and co-founder Tarun Mehta termed the new policy as a "great move for both customers and OEMs". "It lowers the upfront cost that the consumer has to pay and allows OEMs to build superior products at an affordable price point," he said adding, the policy opens up new opportunities in financing options. "Based on our learning, it will likely take some time for consumers to understand and adopt this model of ownership, but in the long run it will be a big boost to the Indian EV industry. "It will also make it easier for new players to join the industry. With BS-6 increasing petrol scooter prices, we expect consumers to shift to electric scooters, which offer great performance, in the months to come," he added, Hero Electric Managing Director Naveen Munjal said, "For this to take off and be able to efficiently pass on the benefit to the consumer, we ought to work towards a strong infrastructure that allows EV owners to charge and swapping batteries wherever they require. I look forward to more such positive interventions." Okinawa Managing Director and founder Jeetender Sharma said, "The policy now allows selling electric vehicles without batteries. This widens the scope for manufacturers and buyers both...This is also expected to reduce the overall cost of acquisition of the product by saving amount in the vehicle registration procedure, thus offering affordability." Likewise, a spokesperson of Ampere Electric said this will reduce the cost of acquisition of EVs, especially for two- and three-wheelers, and allow more people to shift from traditional to a more sustainable and affordable green mobility solution for last-mile connectivity. While allowing registration of electric vehicles without pre-fitted batteries, the Ministry of Road Transport and Highways (MoRTH) in a letter to Transport Secretaries of all the states and UTs had clarified that vehicles without batteries can be sold and registered based on the type approval certificate issued by a 'Test Agency'. The ministry had also stated that there is no need to specify the make/type or any other details of the battery for the purpose of registration. However, it said that the prototype of the electric vehicle and the battery (regular or swappable) are required to be type-approved by the test agencies specified under Rule 126 of the Central Motor Vehicles Rules, 1989.

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