July sales of electric two-wheelers improved by 11% over June

India sold 51,299 e-two-wheelers at higher prices two months after a subsidy cut on FAME II

Our monthly sales reports for another amazing month have been released for the EV field, which continues to grow faster than unicorns. The overall retail sales figures for July 2023, released on the Vahan government website, are expected to increase slightly due to new vehicle registration additions nationwide. However, with a growth of 11.55% month-on-month, the 51,299 units in July 2023 also represent a 10% year-over-year increase as July 2022 overall sales were 46,607 units.

From a macro perspective, India’s electric two-wheeler industry continues to record growth, both in the calendar year and fiscal year. In the first seven months of 2023, 486,649 units were sold, up 58%.

269,565 units were sold in the first 4 months of the current financial year, up 44%. Despite weaker numbers in June and July, double-digit growth was driven by record sales in May (105,445 units, up 148% year-on-year) before FAME subsidy reductions in June raised EV prices. 

There was a month-on-month increase in July for Ola, TVS, Ather, Bajaj, Greaves, and Hero Vida. A detailed examination of Vahan’s retail figures reveals that of the 148 competing two-wheeler OEMs, most major players posted month-on-month growth, with July sales improving their sales in June 2023. Each of them sold more than 1,000 units last month, accounting for 43,566 units, or 85% of total sales in July 2023.

Market leader Ola Electric took the lead with 18,333 units, up 4% from 17,622 units in June 2023. It captured a 36% market share. Ola Electric continues to outperform its rivals in the current financial year – totaling 86,679 units from April to July 2023, 40,051 more than the second-largest electricity supplier.

TVS Motor Co sold 9,599 iQube, up 22% from 7,856 units in June, and achieved a market share of 19% last month. Ignoring the May 2023 sales record for TVs or other OEMs, the July figures are the most impressive monthly sales for TVs. This is for the first 4 months of fiscal 2024. This is after April (8,758) and June (7.856). Cumulative sales from April to July 2023 are 46,628 units. Thanks to this achievement, TVS iQube cumulative sales have surpassed 150,000 units on the domestic market since the e-scooter launch in January 2020.

Ather Energy, the Bengaluru-based maker of smart electric scooters, came in third, selling 6,198 units last month, up 35% from 4,596 units in June. Bajaj Auto, which has ramped up Chetak production and expanded its network, sold 3,912 units, up 30% from 3,002 units in June.

While Okinawa Autotech ranked fifth and saw sales decline 18% to 2,138 units, Greaves Electric Mobility with 2,043 units improved June sales by 42%. However, its sister company Ampère Vehicles, with 1,343 units, recorded a 16% monthly decline. Hero MotoCorp, with 951 Vida units sold, doubled its June performance with sales up 104% month over month.

Developing the Indian market for e-two-wheelers

Although sales in June 2023 are a harsh reality check for OEMs who are extremely optimistic that demand will continue to grow to 65,000 units per month, the slight improvement in retail sales in July 2023 indicates that the electric two-wheeler market in India has matured.

Although the subsidy reduction of 25 ME has resulted in increased product prices, nearly 100,000 buyers – 97,283 – have chosen to purchase an eco-friendly and zero-emission two-wheeler during the past two months, indicating that consumers prefer pocket-friendly electric vehicles over gas-powered scooters or motorcycles.

With the possibility that the FAME subsidy program will not be renewed, OEMs and electric vehicle buyers will have to argue that market dynamics will take over. This is even as OEMs and their components and technology ecosystems shrink. Efforts to reduce development and product costs to improve electric vehicles’ affordability compared to two-wheelers powered by internal combustion engines.

A 5-year program for faster adoption and production of electric vehicles in India (FAME India Phase II) developed by the Ministry of Heavy Industry, with a total support budget of Rs 10,000 crore, will end on 31. March 2024. Until July Date As of October 20, 2023, all 740,722 electric two-wheelers have been sold under FAME India Phase II. Companies are also working to develop lower-cost versions of their popular electric vehicles. For example, TVS Motor Co is working on a cheaper iQube. This is even though it is already cheaper than its main competitors, Ather, Bajaj Auto, or Ola Electric. This means using a smaller battery and less character.

As in the gasoline-powered two-wheeler market, stiff competition for electric vehicle buyers will prompt OEMs to launch newer and more innovative products with an emphasis on the latest technology and range. Some OEMs will also develop variants with optimized features to reduce costs but at a lower sticker price.

While July’s retail numbers, like June’s sales, are a reality check for electric two-wheelers, electricity is still here as a value proposition in terms of portability. While personal electric vehicle purchases have slowed significantly from six months ago, continued demand from last-mile delivery operators for electric two-wheelers across the country is expected. It is expected to maintain momentum in the current market scenario. Monthly sales figures should improve in a few months. After all, the holiday season is close.

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