June 2023 saw a decline of over 61 percent in electric two-wheeler sales
The recent reduction of FAME II subsidies by the Ministry of Heavy Industry has had a significant impact on electric two-wheeler growth in India.
Sales of electric motorcycles, which peaked in May this year, plummeted in June. Sales of electric motorcycles fell by 61% from the previous month. They were hit hard when the Indian government cut FAME II electric vehicle subsidies.
Many people bought electric motorcycles in May. This led to an increase in electric motorcycle sales data in May, but a sharp decline in June. The reduction of FAME II subsidies by the Ministry of Heavy Industries has had a significant negative impact on the growth of the electric two-wheeler market in India. The sudden decline in motorcycle registrations and sales is a direct result of cap incentives that have pushed up retail prices across the electric motorcycle industry.
In May, sales reached a record high of 1.5 million units. However, this was before subsidies were discontinued. Rohan Kanwal Gupta, vice president and head of the corporate ratings sector at the Investment Information and Credit Rating Agency (ICRA), told Autocar Professional that the sharp decline in sales has stimulated a surge in retail sales that has curbed and said it was a direct result of incentives. 15,000 to 35,000 rupees for the entire EV motorcycle industry.
Kanwal said the industry’s sales volume had increased from 66,000 in April 2023 to 150,000 in May 2023. “Retail sales are expected to recover gradually. In the future, customers are expected to cope with price increases in this segment,” he said.
The reduction in FAME II subsidies has hit some of India’s leading two-wheelers
June 2023: Top electric scooter companies’ sales
|
Company Name |
Sales in May | Sales in June | MOM Growth (%) |
| OLA ELECTRIC | 28,629 | 17,552 | -39% |
| TVS MOTORS | 20,398 | 7,791 | -62% |
| ATHER ENERGY | 15,407 | 4,540 | -71% |
| AMPERE ELECTRIC | 10790 | 3,038 | -72% |
| BAJAJ CHETAK | 10064 | 2,969 | -70% |
| OKINAWA AUTOTECH | 2,907 | 2,615 | -10% |
| HERO ELECTRIC | 2,109 | 1,135 | -46% |
| PURE EV | 509 | 820 | 61% |
| OKAYA EV | 3,876 | 425 | -89% |
| KINETIC GREEN | 897 | 203 | -77% |
| BGAUSS AUTO | 1,817 | 190 | -90% |
The FAME II subsidy cap has hit most of India’s major two-wheeler companies including Ola Electric, Hero Electric, Ather Energy, Ampere Electric, Bajaj Chetak, and others.
June 2023: Top electric Motorcycles companies’ sales
|
Company Name |
Sales in May | Sales in June | MOM Growth (%) |
| REVOLT MOTORS | 571 | 711 | 25% |
| TORK MOTORS | 210 | 44 | -79% |
| ULTRAVIOLETTE | 25 | 41 | 64% |
| KABIRA MOBILITY | 12 | 14 | 17% |
| HOP ELECTRIC | 13 | 11 | -15% |
While e-scooter vendors have suffered a significant drop in sales, some e-bike vendors such as Revolt, Ultraviolette, and Kabira have still kept up the pace despite subsidy cuts.
Sanjay Behl, CEO and general manager of Greaves Electric Mobility, said the sharp decline in electric two-wheeler sales and the reduction of FAME II subsidies by the government are the current obstacles to sustaining the accelerating adoption of electric scooters in the industry. He said it was an issue.
Although there is a possibility that the spread of EVs will temporarily slow down due to the rising price of EVs, we do not expect the industry’s growth trajectory to change. We believe that as technology advances and economies of scale are achieved, electric vehicles will become more affordable,” Bale said.
Manufacturers should intervene to stop the slide, say dealers
Auto dealers, who form the last mile of customer loyalty, also acknowledge that the coming months will be difficult for electric two-wheelers.
Former Chairman of the Federation of Indian Automobile Dealers Associations (FADA), Vinkesh Gulati, has admitted that India’s electric two-wheeler industry has been thrown into turmoil by ever-changing regulations, most recently by drastic cuts in FAME II subsidies.
“The enrollment for the summer will decrease by 30%, and this trend will continue through the holidays,” Gulati said.
He also suggested that OEMs will have to make the difficult decision to absorb most subsidy cuts to combat slowing growth. This will enable them to stem further declines in electric motorcycle sales.
CONCLUSION
While increased EV prices might temporarily slow down India’s electric two-wheeler industry, it is expected that customers will absorb the price hikes and retail sales will recover gradually.
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