Gujarat based electric bikes maker, Electrotherm India Ltd (EIL) has delayed the launch of its electric three-wheeler owing to working capital crunch. The company is ready with the product but has decided to wait for the right time before it starts production of the vehicle.
"We are ready with the electric three-wheeler product, and estimate that there is huge market for the e-three wheelers in India as prices of compressed natural gas (CNG) have shot up. However, the working capital requirement to go into production of the electric three-wheelers is at least four times that of e-bikes. Hence, we have decided to wait for the appropriate time for the launch", company sources said.
EIL feels that there is significant market potential for electric three wheelers in the cities, where effective speeds of such vehicles is anyway not very high,and as CNG prices are hovering around Rs 40 for a kg, CNG powered auto-rickshaw pullers would be happy to have a cost effective alternative. Sales of e-bikes in India have dipped below 3000 units a month from an earlier 7000-8000 units per month after the Ministry of New and Renewable Energy (MNRE) subsidy was withdrawn earlier this year.
Overall industry sales have dropped by 70-80 per cent, informed Society of Manufacturers of Electric Vehicles (SMEV) sources.
While sales had picked up significantly last year after the subsidy scheme was announced in November 2010, makers had started to pass on the benefits of the subsidy scheme to the buyer, which was to be re-imbursed by the MNRE.
According to the scheme, incentives up to 20 per cent on the ex-factory prices of the vehicles were offered, with a cap of Rs 4,000 for low speed electric two-wheelers and Rs 5,000 for high speed e-bikes.
"Our sales had grown by around 70 per cent touching 80,000 units during last fiscal", said Avinash Bhandari, joint managing director of EIL. After doling out the incentives to customers, the company,which is yet to receive re-imbursement from the ministry claims that at least two to three months of working capital is stuck with the MNRE.
This has resulted in production slowing down leading to a supply crunch in the market pushing wait periods for an e-bike to two to three months now. "The supply is limited. We are not embarking on any network expansion, and making only as many bikes as our books can sustain", said a highly placed source in the company.
While recent fuel price hikes have lead to a rise in footfall at the dealerships, hardly five per cent is converting into sales as people are holding back their decision to buy in anticipation of the MNRE scheme to be re-introduced.
In place of a Rs 5,000 subsidy per bike, EIL is at present offering a discount of Rs 1500 on its e-scooters.
"We are also losing customers due to the long wait period", the source admitted. Over 250 e-bike dealerships have shut shop in the country, and another 250 are in the process of closing down. Industry insiders estimate the total number of dealerships in the country to be around 1000.
