Bhatia’s comments should be viewed in light of the recent notification from the Ministry of Heavy Industries, issued in mid-March.
South Korean conglomerate Posco Daewoo has delayed its return to the Indian market with electric two-wheelers due to unclear electric vehicle (EV) policies and ongoing internal discussions regarding its commercial strategy.
According to HS Bhatia, MD of Kelwon Electronics and Appliances Pvt. Ltd, Daewoo’s exclusive manufacturing partner in India, the EV category lacks stability from their perspective. Bhatia highlighted the inconsistency and lack of clarity in government policies as a major concern. He mentioned that they initially believed the FAME II subsidies were ending by the end of March, only to discover their extension later. He explained that when an entrepreneur or manufacturer plans a business, they require visibility on government policies for the next two to three years if not five years.
Bhatia’s comments come in light of the Ministry of Heavy Industries’ recent notification in mid-March regarding the Electric Mobility Promotion Scheme 2024. The scheme, with a total outlay of Rs 500 crore, is valid for four months, from April 1 to July 31. It aims to continue subsidies for electric two—and three-wheelers.
The new scheme ensures incentives for electric two- and three-wheelers sold after the expiration of the second phase of the FAME scheme on March 31. FAME II, originally implemented in 2019 with a Rs 10,000 crore outlay for three years until 2022, was extended to March 2024. Last month, FAME II’s budget was increased by an additional Rs 1,500 crore, with subsidies applicable for vehicles sold until March 31 or until funds are exhausted, whichever comes first. The scheme has provided subsidies for around 1.47 million electric vehicles, including 1.30 million two-wheelers, 150,613 three-wheelers, and 18,794 four-wheelers.
Daewoo, once a well-known automotive brand in the Indian passenger vehicle market from 1995 to 2003 before exiting the country, showcased a range of consumer electronics and automotive aftermarket products, including lead-acid batteries for two- and four-wheelers, Daewoo-branded lubricants, and electric bicycles in New Delhi last October. The company’s senior executive had also announced plans to enter the e-mobility segment with electric bicycles, scooters, and motorcycles.
Despite the policy uncertainties, Bhatia mentioned that his company is exploring various options, including whether to develop the technology in-house or partner with a company that has the necessary technologies and manufacturing facilities. He estimated that it would take at least six months to one year before they launch their product range in this category.
