June 03, India: India has hit a significant milestone in electric 2-wheeler sales with the number of units sold in a single month exceeding 1,00,000. May 2023 witnessed an astounding escalation of electric two-wheeler sales of over 57% as compared to April 2023, thereby making it the best month for EV sales in the country so far. Brands like Ola Electric, Ather, TVS, and Bajaj reported their best monthly sales in May.
However, the major reason for the chart-topping sales is the fact that May was the last month with the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) subsidy. Under the FAME II scheme, the government of India had been providing a subsidy of Rs 15,000 per kilowatt-hour with a maximum capacity of 40 percent of the vehicle cost. However, the government has now revised the subsidy policy which has come into effect from 1st June 2023, with a reduction in the subsidy amount to Rs 10,000 per kWh and a cap of 15 percent of the vehicle cost. This 37.5% reduction in subsidy prompted value-conscious Indian buyers to make their purchases earlier and inevitably led to an increase in prices of these two-wheelers, as manufacturers had to compensate for the reduced subsidy.
Several well-known brands in the electric two-wheeler sector, including Ola and Ather, have already adjusted their pricing to compensate for subsidy reduction through increases in price of their electric scooters.
Based on end-of-day sales data from the government's Vahan website as of May 31, 1,04,771 electric two-wheelers were sold in India. Ola Electric has maintained the top position on the list by selling 28,438 electric scooters in May 2023. It is by far the only EV brand to consistently sell over 20,000 electric scooters per month.
TVS has acquired the second spot in the retail sales list with the sale of 20,254 electric scooters in May. The retail sales of the company’s electric scooters have also shown significant growth in 2023. With 15,256 sales, Ather ranked 3rd in the sales list in May, followed by Bajaj with 9,911 sales.
Despite the reduction in subsidy, the prospects for the EV two-wheeler industry are expected to remain strong due to the rise in the cost of petrol and diesel along with the cost-effective nature of two-wheeler travel. Moreover, the significant sales procured by these two-wheeler brands clearly reflect the growing interest of Indian consumers towards the the adoption of electric vehicles, thereby making the country expand its footprint in global electromobility and switching to sustainability.