The Society of Manufacturers of Electric Vehicles or SMEV welcomed the decision by the Ministry of Heavy Industries (MHI) in order to settle pending issues of Original Equipment Manufacturers and to bring the sector to its feet.
Sohinder Gill said, “The beginning resolution of disputed OEM issues augurs well for the sector. It’s time to allow the sector to stand up on its own feet again, and efforts to revitalize the electric mobility industry can begin.”
Gill said the industry was in desperate need of a solution to the subsidy blockade, which has been choking the sector for 15 months.
He called for a gradual localisation of the sector as a viable option. The dangers of force-localisation are well known. We have seen OEMs try to purchase locally but at the expense of quality components. This has led to fires, short circuits, and parts which have had to be recalled.
The localisation rate should have started much higher – 70% to 80%, as there was no supply chain at the time. It could then gradually be reduced to 50%. Gill stated that this was not true with FAME II PMP standards that required item-by-item localisation requirements that were more difficult to meet. This created supply bottlenecks which led OEMs to scramble for parts, which created the problems OEMs face today.
Gill stated that the solution was a flexible policy approach until localisation could be achieved. Gill also called on the ministry to assist in the market’s rehabilitation. Gill also urged the ministry to help the market rehabilitate.
Gill stated in a press release that “if these companies aren’t revived, then the organisations who built the EV eco-system for the first 10 years or even more, may be forced to close down. This would set a bad precedent in the EV industry, including global investment funds.”
