In May, the domestic electric two-wheeler (E2W) market witnessed monthly sales surpass the one lakh threshold with Ola Electric dominating the market for the first time as a result of a last-minute buying frenzy spurred by the announcement of a subsidy drop on such vehicles. Approximately 57 percent more than the 66,727 units recorded in April 2023, according to data from the government portal Vahan, retail monthly sales of electric two-wheelers reached a new high of 104,845 units in May 2023.
E2W registrations increased by 147 percent year over year (YoY) from 42,415 units sold in May 2022. Industry participants claim that the record sales were largely the result of consumers planning their purchases in advance during the final 10 days of May since E2W manufacturers warned that there would be a price increase after the subsidy withdrawal.
Buyers reserved cars at cheaper prices with a higher FAME-II subsidy in anticipation of a 15-20% price increase in June. Due to problems with supply shortages and delays in subsidy disbursement, the numbers fell by about 23% in April.
It should be noted that Vahan only keeps track of the total number of vehicles that have been registered (post-sales) and excludes vehicles that have been reserved. Additionally, it disregards low-speed E2W sales and omits information for Lakshadweep, Madhya Pradesh, and Telangana, therefore May’s sales must have been greater.
The dominance of Ola electric
Ola Electric is the market leader in India’s electric two-wheeler business with a market share of 17.57% and cumulative 12-month sales of 108,130 units. Just 6,764 units separated it from No. 2 Okinawa in the final numbers game, while 11,224 units separated it from third-place Hero Electric.
The fact that Ola Electric consistently sold more than 16,000 units over the months of October, November, and December was what set it apart from the competition for the market leader designation. In contrast, Okinawa and Hero Electric both had monthly sales declines in November and December. It’s possible that this was because neither of these businesses was able to fully account for the FAME II subsidy.
A record 28,438 units of Ola Electric were registered last month, up more than 29% from the 21,991 units registered in April. It should be mentioned that the government was looking into the Bhavish Aggarwal-led company, along with Ather Energy, TVS Motor, and Hero MotoCorp, for allegedly invoicing their proprietary software and e-scooter chargers separately as accessories in order to obtain FAME-II subsidy.
After this, all four manufacturers last month resolved to reimburse customers for the cost of chargers and software, totalling INR 288 Cr. Ola Electric reportedly had to give 1 lakh Ola S1 Pro customers a refund totalling INR 130 Cr. Ola Electric says it sold over 35,000 e-scooters in May in a statement on Thursday.
