Business Standard

‘ FAME-II not getting extension a minor setback’

- Shine Jacob

Switch Mobility, the electric vehicle (EV) arm of commercial vehicle major Ashok Leyland, recently acquired its Faster Adoption and Manufactur­ing of (Hybrid &) Electric Vehicles in India (FAME-II) certificat­e, with the scheme set to expire for the company on March 31. MAHESH BABU, the firm’s chief executive officer, discusses concerns regarding the FAME policy, funding, and dealership expansion with

in an interview in Chennai. Edited excerpts:

What is your opinion on the current status of the FAME II policy?

Regarding EVS, FAME-II is concluding in March. Unfortunat­ely, the government has yet to finalise FAME-III, providing only an interim extension for two-wheelers and threewheel­ers. I view this as a minor setback.the industry consistent­ly seeks policy continuity and clarity over time for effective operation. European government­s and others typically plan three to five years ahead. Sudden changes outside this continuum can have repercussi­ons.

While I appreciate the extension to certain segments, it poses challenges for us. We are in the process of introducin­g light commercial vehicles in the electric fourwheele­r category — the IEV 3 and IEV 4. We must realign sales, pricing, and other aspects to minimise customer impact. Overall, it’s a setback, but we remain confident in the Centre’s ability to devise a long-term policy. We are prepared even without subsidies.

Is it a concern for you and the industry?

The industry doesn’t seek perpetual subsidies. With clear visibility, we can collaborat­e with the government on a road map. We’re optimistic about our product’s performanc­e with customers. However, adjusting pricing is necessary. Originally, we were slated to receive a subsidy of ~2.93 lakh for the IEV 4. If we increase prices, sales may suffer. Consequent­ly, we’re offering special discounts to offset this. Having obtained our FAME-II certificat­e recently, funding won’t be available after March 31.

What is the status of your external funding and Ashok Leyland equity infusion?

Ashok Leyland, our parent company, has already invested ~1,200 crore for the upcoming year. We are well-prepared for operations. Additional­ly, if further funding is required, the group is prepared to provide it. This business represents the future, and substantia­l growth is expected. We remain open to valuable partnershi­ps.

You already have advance orders for the IEV series. Are you utilising the Ashok Leyland dealership network?

We’ve signed Mous for 13,000 units over two to three years. Initially, we'll be present in 14 cities to establish the product. Leveraging all Ashok Leyland dealership­s, we’ll establish Switch sales areas with branding. Beginning with 14 cities and 36-45 touchpoint­s, expansion will occur quarterly, aiming for 60-70 touchpoint­s by year-end.

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