“I don't think the industry dies,” Tarun Mehta’s Take On FAME-II Expiry

With elections looming around the corner, the Indian Government seems to have decided that it is no longer going to extend the FAME-II subsidies. While the EV industry itself seems to have to eventually gear up for this inevitable day, several key players feel that the total disappearance shouldn’t take place immediately as it will negatively impact the growth of the industry.

One such voice is of Tarun Mehta, Ather’s chief with whom we spend some time discussing the matter at hand. Here’s what he had to say:

On FAME-II’s Performance So Far

I think FAME-II has done a good job, though we've had a fair bit of shock this year (due to reduction in subsidies per unit), but I think FAME-II still helped the industry grow 4-5 times in a very short span. I think the industry needs more time to be able to catch up on margins, to be able to continue offering competitive prices and reduce them further.

The Negative Impact Of No FAME-III

If FAME-II ends (proposed on March 31, 2024), and if there is no FAME-III, we run the risk of seeing another year of flat to limited growth. I think we've got a great momentum going, I think consumers are excited, new products can continue launching, so seeing a more gradual tapering down of subsidy is just the more logical and right step.

We’ve gone from Rs 60,000 to Rs 20,000 in one shot, you can take it down to zero, I don't think the industry dies, except that I think you will see slower growth. We've already seen three quarters of lost growth this year, what we saw in March this year (2023) will only happen in January (2024), which is why nine months of no growth.

Industry will eventually always catch up, so if there's no FAME 3 next year, industry will catch up, but I think we'll see a pretty muted 2024, which is another year of lost growth for the EV industry.

Changes To Ather’s Product Line-up

Right now, it's (FAME-II) there. If it's not there then we'll have to retweak the product portfolio to remain competitive. And we'll have to keep on growing. And still insure, probably, I'm not sure, but certain products and certain price points won't remain feasible, that's for sure.

And launching new stuff is not that easy then, you can't launch stuff in like three months. It'll take you like a year to re-plan, so we'll do it. Hence, which is why I was saying, I don't think industry dies, I don't think good companies will die, but I think it will slow down the industry once again.