Testing times for EV industry as sales decline 20% in FY21

The Indian EV industry could sell 2, 36,802 electric vehicles, including electric two-wheelers (E2W), electric three-wheelers (E3W) and electric four-wheelers (E4W) in FY21. It had sold 2,95,683 vehicles in FY20.

By:April 23, 2021 9:39 AM

Electric vehicle (EV) sales in the country took a beating in FY21, declining by around 20% as compared to the previous fiscal. The Indian EV industry could sell 2, 36,802 electric vehicles, including electric two-wheelers (E2W), electric three-wheelers (E3W) and electric four-wheelers (E4W) in FY21. It had sold 2,95,683 vehicles in FY20.

According to a sales report for FY21 prepared by the Society of Manufacturers of Electric Vehicle (SMEV), in the E2W segment, the EV industry registered sales of 143,837 units, which include 40,836 high-speed and 103,000 low-speed E2W. The sales of E2Ws declined by 6% in FY21, having registered sales of 1,52,000 units in the FY20.

As many as 88,378 E3W were sold in FY21 as against 140,683 units in FY20. The data doesn’t include E3Ws that are not registered with the transport authority. In the E4W segment, the industry witnessed registration of 4,588 units compared to 3,000 units in FY20, registering a 53% increase.

Sohinder Gill, director-general, SMEV, said, “We were anticipating a good growth before the start of FY21, but sales remained stagnant due to various reasons. The sales in electric three-wheeler and two-wheeler segment stood low as compared to last year. A good thing has happened that people have started moving towards advanced batteries, that is, lithium. The city speed and high-speed category in the two-wheeler segment have witnessed growth. However, much more needs to be done to achieve the target under the FAME II scheme. Timely intervention by the government in form of a policy change is required to fuel the growth and achieve the target by the end of FY22.”

According to the industry, a strong bank finance mechanism is still missing in the country. Only a few banks like SBI and Axis offer loans on select models.

Another important factor that would transform the industry is creating awareness about green vehicles. The Central and state governments can play a crucial role in motivating and encouraging citizens to adopt e-vehicles. “We have seen in the case of Delhi, where the state government is doing a tremendous job in creating awareness, which has encouraged more people to adopt EVs,” an SMEV statement said.

India’s e-commerce sector has shown a steep growth curve of growing over 200% year on year, hence its dependence on logistics increases proportionately. A key reason for the growth in EV adoption by B2B players is the cash factor — electric vehicles are cheaper to maintain compared to ICE vehicles.

Corporates in India are also proactively transitioning towards electric vehicles. For instance, Amazon India and Flipkart have announced that they will deploy EVs in their delivery fleet. The future of B2B is positive and we will see a lot of traction coming from this segment for the next two to three years, SMEV said.

Many states, including Delhi, Maharashtra, Andhra Pradesh, Bihar, Chandigarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Odisha, Meghalaya Punjab, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand, have rolled out their EV policy. However, some are yet to implement the policy.

Early implementation of state-level policies could assist in creating a larger ecosystem that would help the industry to grow at a faster pace. Additionally, the state government policies should be focused on demand generation for the initial period, which would help in getting more volumes on the road, it said.

On the charging infrastructure, SMEV said that around, 1,300 charging stations have been set up till now. Many corporates have ventured into the segment and started installing charging stations across the country. “We anticipate that in the next five to six years, we will be able to create a robust charging infrastructure in the country,” it said.

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