Amid steep discounts offered by EV makers, India’s electric two-wheeler (E2W) sales increased by nearly 24 percent Year-on-Year (YoY) to 81,963 units in February of 2024 and crossed 800,000 units in the 11-month period of FY24, as per the data available on Vahan portal
In February 2023, India’s EV two-wheeler registrations were recorded at 66,053 units and touched a high of 1,04,055 units in May 2023. Since the reduction of FAME-II subsidy in June, registrations went down to nearly 45,000 units, as per Vahan website.
The E2W registrations were 36 units more than ones in January 2024 (81,927 units), showed data. EV 2W penetration inched up from 5.6 percent in January to 5.7 percent in February.
Furthermore, Year-to-Date (YTD) FY24 average monthly run rate was at 73,190 units (+21 percent YoY) and FY23 average monthly run rate was at 60,500 units.
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.
Industry observers reckon that the registration numbers indicate of “market stabilisation” despite the government’s move to lower the incentives under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) scheme Phase II.
It is to be mentioned that FAME India Scheme is a government subsidy scheme under the National Electric Mobility Mission Plan (NEMMP) and stands for Faster Adoption and Manufacturing of Hybrid and Electric Vehicles
The Central government reduced the budgetary allocation for the FAME scheme by nearly 44 percent to Rs 2,671 crore for FY25, which industry players predict, could result in a slowdown in the adoption of EVs.
In FY24, nearly Rs 4,807 crore was set aside for FAME schemes, the government's budget allocation document published on February 1 showed.
“It seems like the impending withdrawal of subsidies is causing manufacturers to rush and clear their inventories before the deadline. This could lead to a sudden increase in prices once the subsidies are gone, revealing the true adoption level of electric two-wheelers. It'll be interesting to see how this plays out in terms of actual consumer demand and adoption rates," said Sohinder Gill, director general of the Society of Manufacturers of Electric Vehicle (SMEV).
Ola’s market leadership remains intact
In a hypercompetitive market where nearly 170 players are looking at a sizable share of the EV pie, six OEMs continue to be among the top six positions,- Ola Electric, TVS Motor Co, Ather Energy, Bajaj Auto and the Greaves Electric-Ampere Vehicles combine.
Ola Electric retained its top spot with highest registrations at 33,722 units in Feb 2024, commanding 41.1 percent market share, followed by TVS Motors at 17.7 percent, Bajaj Auto at 14.2 percent, Ather Energy at 11.0 percent, and Greaves Electric (formerly Ampere) at 3.2 percent.
Ola Electric announced that it recorded 35,000 units in sales ( including undelivered models) in February and continued its pole position in the EV 2W segment with a marketshare of 42 percent. The Bhavish Aggarwal-led company clocked its highest ever monthly registrations during the month and posted an year-on-year (Y-o-Y) growth of nearly 100% compared to the same month last year. It has announced price cut in the last 15 days.
“This is the highest-ever registrations at Ola Electric in February crossing 35,000 units. Last three months, collectively put together we have crossed around 1,00,000 units of sales. We are seeing that people are buying for value and not just the discount, discount has also helped in a way,” said Anshul Khandelwal, Chief Marketing Officer, Ola Electric.
Khandelwal also shared that the overall EV penetration in India has gone up to 18.5 in comparison with ICE scooters in the market.
TVS Motor Company’s EV sales registered a growth of 16 percent with sales increasing from 15,522 units in February 2023 to 17,959 units in February 2024. Ather Energy recorded an EV registrations of 8,983 units which was down 10 percent year-on-year.
“This year Feb had one extra day, boosting the growth to a certain extent. Year to Date in in FY24 average monthly run rate at 73,190 units (+21% YoY). FY23 average monthly run rate of 60,500 units,” said a report by Elara Securities.
Season of hefty discounts
The increase in numbers also comes at a time when EV makers are offering big discounts to their customers to clear inventories and accelerate adoption.
In the first week of February, Ola Electric decreased prices by up to Rs 25,000 on its S1 Pro, S1 Air, and S1X+ models, leading to a hike in bookings.
Similarly, Ather Energy slashed the price of its 450S model by Rs 20,000. Industry sources say that the EV makers will continue to reduce prices to accelerate adoption as well as to increase market share in this competitive market.
Increased adoption in tier-II and rural areas
EV markers also say that there is an increased adoption in Tier-II as well as rural areas. Industry sources said that there has been increased EV penetration in states like West Bengal, Jharkhand, Bihar, Madhya Pradesh and Uttar Pradesh.
In fact, to accelerate adoption EV makers are setting up service centres, dealerships and experience centers in these areas.
“Rural market is slowly picking up, tier II cities are doing very well for us in Karnataka, Delhi and Telangana…We will be setting up more dealerships at Tier-II cities,” said an official of an EV maker on the condition of anonymity.
Ola Electric is also witnessing increased adoption in Tier-II and Tier III cities. As Khandelwal of Ola Electric puts it, “They still form a small number but there is definitely a change in adoption rates, it is going up steadily. We are even witnessing adoption in Tier-IV cities.”
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