EVs account for 8% sales of total vehicle sales in May: FADA report

The 2-wheeler sales were positively influenced by seasonal factors like the marriage season, changes in the FAME subsidies effective from June, and the recovery of rural demand, which hint towards a promising future in the aftermath of the COVID-19 pandemic

According to the latest data from the Federation of Automobile Dealers Associations of India (FADA), electric vehicle (EV) sales accounted for about 8 percent of the total vehicle retails in May 2023. The auto retail body said that this was due to a surge in two-wheeler EV (E2W) and three-wheeler EV (E3W) sales―the former constituting 7 percent of total sales and the latter, a whopping 56 percent.

Furthermore, the commercial vehicle (CV) and passenger vehicle (PV) categories also marked their presence in the EV landscape, with respective contributions of 0.5 percent and 2.5 percent, as per FADA data.

Commenting on the sales performance, FADA President Manish Raj Singhania, said, "The two-wheeler sales were positively influenced by seasonal factors like the marriage season, changes in the FAME subsidies effective from June, and the recovery of rural demand, which hint at a promising future in the aftermath of the COVID-19 pandemic."

It may be recalled that the domestic E2W industry crossed the one lakh monthly mark in sales for the first time in May as the announcement of a subsidy cut on such vehicle purchases sparked a last-minute buying rush.  As per Vahan data, retail monthly sales of E2Ws scaled a new high of 104,845 units in May 2023, up about 57 percent from the 66,727 units registered in April 2023.

Auto industry retail up by 10 percent

Meanwhile, auto retail sales witnessed a 10 percent year-on-year (YoY) growth in May on the back of robust demand across segments including PVs, two-wheelers and tractors. Of the total number of vehicles retailed, two-wheelers, three-wheelers, PVs and CVs grew by 9 per cent, 79 percent, 4 percent, and 7 percent, respectively. The total automobile retail sales went up to 20,19,414 units last month, from 18,33,421 units in May 2022.

Commenting on the performance in May 2023, FADA President said, "While there has been a slight -2 percent decline compared to pre-COVID levels, the overall retail figures have shown improvement."

PV sales went up by 4 percent to 2,98,873 units in May from 2,86,523 units in the year-ago period.

"The improved availability of vehicles, the strength of pending orders, and the robust demand for new launches drove a positive momentum, helping the passenger vehicle segment rebound after a slump in the previous month," Singhania added.

Furthermore, two-wheeler retail sales last month rose 9 percent to 14,93,234 units, compared to 13,65,924 units in May 2022. Commercial vehicle retail sales rose by 7 percent to 77,135 units last month, as against 71,964 units in May last year. Three-wheeler retail sales rose 79 percent to 79,433 units last month, compared to 44,482 units in the year-ago period.

Tractor sales rose to 70,739 units, up 10 per cent the 64,528 units sold in May 2022.

"The commercial vehicle segment experienced sustained growth, underpinned by the government's focus on infrastructure development. The bus segment displayed a notable increase, driven by improved financing options and higher sales in academic institutions," Singhania added.

Road ahead

On the business outlook, Singhania stated that the anticipated stable interest rates by RBI’s Monetary Policy Committee (MPC) could maintain vehicle demand and positively impact auto sales. "However, supply chain issues, demand-supply dynamics, and regulatory changes also play a role in shaping the auto retail outlook," he added.