Amid a rise in the adoption of battery-powered scooters among consumers, electric two-wheeler (E2W) sales in the country jumped 36.07 percent to 8,59,269 units in 2023, which is higher than 6,31,476 units in 2022, according to the government’s transportation data portal VAHAN.
“Reflecting on the events of 2023, it proved to be a tumultuous year for electric two-wheelers, marked by policy swings and notorious FAME policy issues. The industry witnessed a reshuffling of winners and losers, as new players seized opportunities left by startups and MSMEs, such as Ampere and Hero Electric,” said Sohinder Gill, director general of the Society of Manufacturers of Electric Vehicle (SMEV).
To be sure, VAHAN only records the total number of sales registered and not the bookings. It also does not take into account low-speed E2W sales and excludes the data for Lakshadweep, Madhya Pradesh and Telangana.
“The important thing to note is that the FAME subsidy was reduced in 2023, and the sales have come despite a slowdown and a correction. This shows that EV adoption is accelerating and may even reach the ICE two-wheeler mark in 2024,” said a top executive from an EV firm on the condition of anonymity.
As per VAHAN data, total electric vehicle retail sales in 2023 accounted for around 7 percent of total automobile sales in the country.
A report by Elara Securities Research said that the YTD FY24 average monthly run rate of EVs is 71,250 units. 2HFY23 average monthly run rate was 72,535 units. For the period of June-December 2023 (post-subsidy reduction) average monthly run rate at 66,973.
The FAME India Scheme is a government subsidy scheme under the National Electric Mobility Mission Plan (NEMMP) and stands for Faster Adoption and Manufacturing of Electric Vehicles in India.
Under FAME guidelines, which were changed in June 2023, the subsidy was reduced from 40 percent to 15 percent.
“Despite customers enjoying temporary benefits from lower prices amid subsidy withdrawals, the industry now faces the challenge of self-sustaining without government support… Market realignment is imminent, with serious players needing innovative approaches to stay competitive,” Gill told Moneycontrol.
Shankar Sundararaman, an auto industry veteran and former global head of retail experience at Royal Enfield, said that the next year will see more standardisation in terms of charging infrastructure, which will change the market dynamics.
“The EV industry will see a lot of change in 2024 as more top players within the ICE vehicle category will get serious about volumes and standardization… This will realign the market share game and bring more serious players,” Sundararaman said.
December sales mark a slowdown
While the calendar year of 2023 saw a healthy momentum for EV makers, helping them scoop up market share, December 2023 saw a slowdown in retail sales.
After logging sales of 75,047 units in October and 91,759 units in November, E2W volumes saw a downtick in December with sales of 75,336 units, according to data available on the VAHAN portal. Industry observers reckon that the sales during December were always lukewarm due to lower consumer demand in that month.
On a year-on-year (YOY) basis, E2W sales went up by 16.51 percent from 64,660 units on December 22.
OEMs and their market share
Most of the Original Equipment Makers (OEMs), barring Ola Electric, saw their registrations going southwards in the past month.
Ruling the sales charts was Ola Electric, which delivered 30,223 units of its electric scooters in December. The sales numbers are a tad higher than 29,917 units sold in November. For the entire calendar year 2023, the company sold 2,66,869 units, as per VAHAN data.
In an official release, Ola Electric stated that it captured a 40 percent market share in the EV2W segment past month. The Bhavish Aggarwal-led company claimed that it clocked its highest-ever monthly registrations during the month and posted a YoY growth of 74 percent compared to the same month past year.
Anshul Khandelwal, Chief Marketing Officer, Ola Electric Technologies Private Limited, said in an official statement, “We believe that we have continued our market leadership for yet another quarter on the back of our strong product lineup comprising S1 Pro, S1 Air, and the S1 X+. Our ‘December to Remember’ campaign has been a massive success, bringing thousands more under the EV fold.”
TVS Motor Company came in second with 12,227 units of vehicle registrations, down by 56.08 percent from 19,085 units in November. For the entire year, it sold 1,66,395 units of e-scooters.
Bajaj Auto came in at the third spot with 10,340 units of Chetak sold, a drop of 14.23 percent from 11,812 units sold in November. For the entire year, it sold 71,799 units.
Ather Energy, which attained the fourth position, sold around 6,485 units in December vis-a-vis 9,260 units in November a decrease of 42.79 percent. For the entire year, it sold 1,04,514 units
Ravneet Singh Phokela, Chief Business Officer of Ather Energy, said, “The EV two-wheeler market is approaching volumes seen before subsidy revisions, and we anticipate a positive end to 2023. More is in store in December as we are gearing up for an exciting and fast-paced start to 2024.”
Greaves Cotton, which was the fifth in the pecking order, sold 2,975 units in December as against 4,413 units in November (a 48 percent MoM decline). For the whole year, it sold 24,036 units.
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