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India’s electric 2W sales decline 57% (M-o-M) after subsidy reduction

Starting from June 1st, 2023, the FAME-II subsidy on electric 2Ws was reduced as follows:


– Subsidy on electric 2Ws reduced from INR 15,000/kWh to INR 10,000/kWh of battery capacity
– Maximum subsidy capped at 15% of the ex-factory price of the vehicle, down from 40%

This has affected the e-2W sales pattern in India. The e-2W sales registered a month-on-month drop of 57% in June 2023 as compared to May 2023. The sales of electric two-wheelers in June 2023 were the lowest in the last 12 months (Jul 2022 – Jun 2023), with only 45,798 units sold, down from May sales of 1,05,340 units.

Source: EVreporter Research, Vahan Dashboard | Low-speed e-2W sales not included

It should be noted that the first half of the calendar year 2023 (H12023) saw a 67% increase in e-2W sales, with 4,34,978 units sold, compared to 2,60,316 units in the same period of 2022 (H12022).

In June 2022, a total of 44,381 electric 2-wheeler units were sold. After a mostly upward trend in sales over the last 12 months, the numbers for June 2023 have dropped significantly after subsidies were reduced and are now nearly the same as they were a year ago. It will be interesting to see the pattern going forward.

OEM-wise performance for the first half of CY 2023 is as follows:

Source: EVreporter Research, Vahan Dashboard | Low-speed e-2W sales not included

Observations:

  • Ola Electric continues its top run with the highest e-2W sales in H1, followed by TVS Motos and Ather Energy.
  • All major OEMs observed sharp declines in monthly sales in Jun 2023. Ola fared better than others with a ~39% decline as compared to a more than 60% decline for TVS Motors and Ather Energy e-2W sales.
  • Hero Electric and Okinawa (the second and third most-selling e-2W OEMs of 2022) continue to decline in the midst of investigations into wrongful subsidy claims.

Also Read: India EV Sales and OEM Performance FY 2022-23

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