Centre demands $60 million refund from e-scooter makers: Here's why
What's the story
The Indian government is calling on six electric scooter manufacturers, including Hero Electric Vehicles Pvt, to return $60 million (nearly Rs. 500 crore) in subsidies for breaking localization rules, Bloomberg reports.
This comes after a series of e-scooter fires last year prompted an investigation into whether companies were meeting localization norms.
Some manufacturers were found to be importing ready-to-use parts, mainly from China, leading to quality control issues and safety concerns for customers.
Details
Ola Electric emerges strong
Amidst the turmoil, Ola Electric has managed to emerge relatively unscathed and establish dominance in India's e-scooter market.
The company is now planning to further localize its supply chain with an electric battery factory and has secured a significant funding round.
Ola's ability to comply with localization rules from the outset of its entry into the market has given it a significant advantage over its competitors.
Insights
Other e-scooter makers struggle
Several e-scooter startups, including Okinawa, Greaves Electric Mobility Pvt, Revolt Motors, Benling India Energy & Technology Pvt, and Amo Mobility Solutions Pvt, are grappling with financial difficulties as the government withholds subsidies worth Rs. 1,200 crore.
This situation has resulted in a combined loss of Rs. 9,000 crore for these companies, making it increasingly difficult for them to secure investments.
What Next?
India trails other countries in electric vehicle adoption
India trails other countries in electric vehicle adoption. Only 1.3% of the 38 lakh passenger vehicles sold last year were electric, according to Bloomberg.
High upfront costs, limited options, and inadequate charging infrastructure have discouraged consumers from making the switch to electric vehicles, even as pollution levels in cities like New Delhi continue to worsen.