SMEV welcomes MHI's efforts to sort out pending issues with OEMs

The permissible imports should have been much higher to start with, say 70%: SMEV

The Society of Manufacturers of Electric Vehicles (SMEV) on Wednesday has welcomed the move by the ministry of heavy industries (MHI) to start settling pending issues of original equipment manufacturers and bring the sector back to its feet.

“The beginning of resolution of disputed issues for OEMs augurs well for the sector”, said Sohinder Gill, Director General SMEV, adding, “It is time that the sector is allowed to stand on its feet again and efforts to revive the e-Mobility sector can begin”.

Terming the news about the ministry giving clean chit to various companies as a move in the right direction, Gill said that the sector was desperate for a resolution of the subsidy blockade that has all but choked the sector for the last 15 months.

However, he called for a tapered localisation in the sector a sustainable option.

Force-localisation comes with dangers, as we have seen some OEMs trying to procure locally at the cost of quality components that have resulted in fires and short circuits and parts that have required to be recalled later.

The permissible imports should have been much higher to start with — say 70 per cent to 80 per cent as the supply chain was not existing at that time and allowed to progressively taper down to 50 per cent.

Unfortunately this was not the case with FAME II PMP norms that mandated  item by item localisation conditions which were tougher to meet and created supply bottlenecks that led to OEMs scrounging for parts and which in turn created the issues OEMs are facing today, Gill said.

“The solution is a flexi-policy approach, until total localisation can occur,” Gill said.

Restore legacy players

Gill also urged the ministry to help the market rehabilitate. Highlighting that the companies like Hero Electric, Okinawa Autotech and Ampere who were market leaders in FY19 and FY20 with 82 per cent share of the market have reported drastic drop in sales and were able to muster only 24 per cent market share in April ’23.

“If these companies are not revived, the organisations that built the EV ecosystem for the initial 10 years or more may have to shut down, setting a bad example in the EV world, including the global investment funds,” Gill said in a statement.