In June 2023, there was a significant fall in the sales of Electric two-wheelers in India. The sales of Electric two-wheelers have been impacted by the FAME 2 subsidy cut. The country-wide price of Electric two-wheelers has significantly increased as a result of the reduction in subsidies, which has caused a 56.3% drop in sales compared to the prior month.
With the FAME 2 subsidy policy revision, the government reduced the subsidy amount from Rs 15,000/kWh to Rs 10,000/kWh and capped it at 15% of the cost of the car. The drop in subsidies has resulted in a decline in sales for all major producers of Electric two-wheelers. The lowest sales level in the previous year was reached in June 2023.
Comparison of electric two-wheeler sales between the months
Compared to the 1,05,340 units sold in May, only 45,798 units were sold in June 2023. It’s important to note that May’s growth was mostly fueled by last-minute purchases and bookings as customers raced to take advantage of subsidy discounts before they ran out. Although roughly 44,381 units were sold in June 2022, adoption was still increasing the previous year. According to Vahan’s data, June 2023 saw the lowest recorded sales in the previous 12 months.
On average, June sales for Ola Electric, TVS Motor Company, Ather Energy, Ampere Vehicles, Hero Electric, Bajaj Auto Limited, Okinawa, and other companies decreased from the previous few months.
Ather only shipped 4,540 electric scooters in June 2023. After the amended subsidy, the Ather 450X’s ex-showroom pricing in Bengaluru is 1,65,435 with the Pro Pack and 1,44,921 without. Ather also hinted at its brand-new 450S electric scooter in June. Ather 450S will be available for purchase for a starting price of 1,29,999.
It will have a top speed of 90 per/h and an IDC range of 115 kilometres. Bajaj ranked fourth in terms of sales in June 2023 with 2,966 transactions. Fifth place with 2,615 sales is Okinawa. In June, Simple Energy also began its deliveries. Simple One electric scooters were only delivered in 10 units by the Bengaluru-based EV startup.
FAME II initiative
2019 saw the commencement of the FAME II scheme, which required a Rs 10,000 crore capital investment. Two-wheelers received 2% of the Rs 10,000 crore in funds committed to increasing EV adoption in India. Given that India is a price-sensitive market and that the cost of owning an electric car is often higher than that of a combustion engine vehicle, the industry praised the FAME II news.
Regardless of when it was withdrawn or phased out, the subsidy cut has slowed the momentum of EV adoption. However, according to Ather, the impact has been greater than anticipated. The outlook for EV adoption in India, according to analysts, is still positive for FY 2024, when CareEdge predicts that volume sales of EV two-wheelers will top 1.5 million units. Nearly 847,000 E2W units were sold in FY 2023.
