The elimination of the subsidy caused Greaves Electric to raise its product prices, resulting in a decrease in consumer demand.
In the fiscal year 2024, revenue from Greaves Cotton’s electric mobility division saw a sharp decline of 77.78%, falling to Rs 612 crore from Rs 1,124 crore the previous year, as detailed in an investor presentation. This significant reduction was largely due to changes in government subsidies provided through the Faster Adoption and Manufacturing of Electric Vehicles (FAME) programme.
The removal of these subsidies caused an increase in the prices of Greaves Electric’s products, which subsequently led to a decrease in customer demand.
In fiscal year 2022, the company’s electric mobility segment generated Rs 522 crore, while in fiscal years 2021 and 2020, the revenues were Rs 176 crore and Rs 136 crore, respectively.
The government launched the FAME-II scheme in 2019 with a budget of Rs 10,000 crore, aimed at encouraging the adoption and local production of electric vehicles. The scheme included subsidies for two-wheeler manufacturers that used domestically manufactured components. However, a 2022 government investigation revealed that seven companies, including Greaves, allegedly breached these local sourcing requirements by incorporating imported components to claim incentives.
In October of the previous year, Greaves announced that it had returned the Rs 124 crore subsidy received under this scheme. Other companies such as Hero Electric, Okinawa Autotech, Benling India, Revolt Intellicorp, Amo Mobility, and Lohia Auto were also instructed to refund their subsidies.
During the last fiscal year, Greaves Electric Mobility launched the Greaves Eltra City, an L3 category passenger vehicle, and expanded its three-wheeler financing network with 16 partners nationwide and 16 state-specific partners, enhancing its commitment to providing accessible and convenient mobility solutions. Recently, the company appointed K. Vijaya Kumar as the Executive Director and CEO of the Greaves Electric Mobility segment, where he will oversee product development, dealer distribution, and market expansion initiatives, among others.
