About 15 per cent EV dealers to shut shop post lockdown

More than 200 dealers or 15 per cent of the 1,400 odd electric vehicle dealerships across the country will likely shut down once the Covid-19 lockdown is lifted, said the Society of Manufacturers of Electric Vehicles (SMEV), the apex body for the EV industry.

EV manufacturers say most dealerships of two wheelers and e-rickshaws, particularly in tier -3 or 4 towns, are owned by first time entrepreneurs who don’t have the financial bandwidth to survive this crisis. Typically it is much cheaper to put up an EV dealership with overheads being as low as Rs 3-Rs 5 lakh.

But that also means these small businesses are not in a position to pay rent and salaries till the lockdown lifts because the going will still be tough in terms of sales.

“The EV industry is in a vulnerable stage and a network collapse is expected once the lockdown ends. Most EV dealerships are small operations and there is no backup support. Since these dealerships are not capital heavy, they attract small investors,” said Sohinder Gill, director general, SMEV.

A dealership in a C-class town must sell at least 10 electric two wheelers and 4 e-rickshaws a month to stay profitable. This year, the EV market sold 1,60,000 two wheelers, 40,000-50,000 re-rickshaws and 5,000-6,000 cars and buses.

Those who buy the e-rickshaws are bottom-of-the-pyramid consumers who will be worst hit by the Covid-19 crisis.

ET Energy world
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