Ather Energy to delay Rs 26 Cr subsidy claims amidst rare earth magnet supply crisis
The company had to make temporary adjustments whereby the EV-maker had to turn to non-domestic sources for rare earth magnets, deviating guidelines under the Phased Manufacturing Program.
Ather Energy on Friday said it will defer applying for subsidies worth Rs 25 crore due to the ongoing rare earth magnet supply shortage, triggered by China’s export restrictions.
The company said that due to the ongoing supply bottleneck, the firm, through its motor suppliers, had to make temporary adjustments to source components that deviate from guidelines set under the Phased Manufacturing Programme (PMP) and PM E-DRIVE.
Under PMP guidelines, components like traction motors, motor controllers, battery packs and power electronics, among other parts, had to be sourced and manufactured domestically. For an original equipment manufacturer (OEM) like Ather Energy to avail subsidies, it must show that it has met PMP requirements for a particular vehicle model.
Ather Energy said that the temporary adjustment is expected to affect its ability to submit demand incentive claims for up to 52,500 vehicles that are manufactured or to be manufactured under the PM E-DRIVE scheme.
The EV maker said that discussions are ongoing with the Ministry of Heavy Industries (MHI) for a temporary exemption from domestic fitment of magnets under PMP requirements.
However, the company added that it has successfully developed a heavy rare-earth-free motor and has received type approval from the testing agency, ARAI, and has also begun receiving PM E-DRIVE eligibility certificates for these motors.
During Ather Energy’s first-quarter post-earnings call, CEO and co-founder Tarun Mehta said that the firm saw the impact of the ongoing crisis restricted to the second quarter. The firm had also said that the supply chain scramble was expected to trigger a small impact on its retail.
Edited by Jyoti Narayan