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EESL Subsidiary To Empanel Electric Two-Wheeler OEMs In Kerala

Convergence Energy Services (CESL), a 100% wholly-owned subsidiary of Energy Efficiency Services (EESL), has issued an expression of interest (EoI) to empanel original equipment manufacturers (OEM) to supply electric two-wheelers (E2Ws) in Kerala.

The last date for submission of bids is July 2, 2021; the techno-commercial e-bid will also be opened on the same day. Prospective bidders are expected to pay a non-refundable and non-adjustable sum of ₹25,000 (~$338.23) towards ‘bidding document cost’.

The scope of the OEMs includes designing, engineering, manufacturing, testing, inspection, supply, transportation, complete system warranty and transit insurance, delivery to the end-consumer, and provide after-sales support.

All micro and small enterprises (MSEs) are exempted from paying the empanelment document fee as long as the business provides proof of registration as MSE (indicating the terminal validity date of their registration), with any agency mentioned in the notification of the Ministry of Micro, Small and Medium Enterprises ( Ministry of MSME).

Similarly, to claim the prescribed exemption for start-ups, a valid ‘certificate of start-up’ recognized by ‘Department of Industrial Policy & Promotion (DIPP)’ along with a business eligibility certificate or any other document issued by the government or recognized institute is needed.

The OEM needs to be an electric two-wheeler manufacturer registered under the Indian Companies Act 1956/2013.

The average annual turnover of the OEM for the last three financial years (2018-19, 2019-20, and 2020-21 or 2019-20, 2020-21 if the production started in 2019) should be greater than ₹150 million (~$2.02 million). For MSEs, the average annual turnover is 25% considered for general bidders if the tender is split and 85% of the average annual turnover for general bidders if the tender is not split.

In the last financial year (2019-20), the net worth should not be less than 100% of paid-up capital; however, it is optional for Indian companies. The OEMs should have experience in manufacturing at least 2,000 E2Ws annually. The model offered by the OEMs must have a minimum of 100 units sold in the last year.

The OEM should have either sold a minimum of 1,500 E2W annually in the last three years or an aggregate of 3,000 E2W in the last three years. Meanwhile, for new-age pure electric vehicle (EV)-based companies, the OEM should have sold a minimum of 1,000 E2W from the date of incorporation (if after 2019).

Past performance of OEMs with CESL, i.e., related to quality, supply, performance, etc., would be considered by CESL during the OEM empanelment. OEM will have to submit the prices of only those models that are eligible under phase-II of the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) India Scheme.

All vehicles should be technically compliant with the FAME II Guidelines and carry an Automotive Research Association of India (ARAI) certification. The E2W must meet all eligibility conditions to avail of the demand incentive FAME II.

Earlier in January this year, the Department of Heavy Industries had announced partial amendments to the FAME-II program. Specific demand incentive for E2Ws of ₹15,000 (~$205)/kWh has now been announced. Earlier, there was a uniform demand incentive of ₹10,000 ($137)/KWh for all vehicles. Also, the cap on incentive for E2W has been raised to 40% of the total cost of the vehicles. The cap earlier was 20% for all vehicles, including E2W.

Meanwhile, according to the Society of Manufacturers of Electric Vehicles (SMEV), 236,802 EVs were sold in India in the financial year (FY) 2020-21, registering a drop of 20% over the sales for FY 2019-20. In its report, SMEV said that in the previous financial year, 295,683 EV units were sold.