The electric vehicle industry in India saw its best-ever monthly sales in May 2023, due to a variety of factors with pre-buying of electric two-wheelers on the back of price hike thanks to the revision in FAME 2 subsidies being a crucial one.
A sharp month-on-month recovery was witnessed in May after a contraction in April. Last month, a total of 157,338 electric vehicles were sold in the country, this includes 104,829 two-wheelers, 44,609 three-wheelers, 7,443 four-wheelers, 274 buses, 160 LCVs and 23 units in another segment.
Going forward, while the demand for electric vehicles across segments is supposed to be consistent, there could be a temporary slowdown in the two-wheeler segment, especially for models which have seen a hike in prices on the back of revision in FAME 2 subsidy.
According to a report by BNP Paribas, electric vehicle penetration in the two-wheeler segment improved to 7% from 5.4% in April. Ola Electric remained the market leader but lost market share, while TVS Motor Co gained the most as its supply issues were resolved. Among the top-five OEMs, the monthly sales volume grew for TVS Motor co the most (132%), while Ampere grew the least (16%).
The penetration improved significantly in Kerala, rising to 16.2% in April-May 2023, from 8.4% in FY2023.
In terms of price revision, Ola increased prices for Ola S1 and S1 Pro models by Rs 15,000, while TVS Motor Co raised the price of iQube by Rs 17,000 to Rs 22,000 and Ather by Rs 20,000, implying a price increase of 10-20 percent.
This in turn is expected to see OEMs introducing more lower-priced models to meet customer demand across various price points. In addition, industry stakeholders believe that while there is going to be slowdown initially, the awareness and maturity of the electric vehicle segment will see sustained growth going forward.
While on one the initial push through the FAME 2 scheme saw early adopters getting incentivised more, the revision in the FAME 2 scheme envisions to be able to support at least 45,000 units per month average for the ongoing fiscal.
| ELECTRIC VEHICLE SALES IN INDIA | ||||
| Segment | May ’23 | May ’22 | Change (in units) | Change (in %) |
| Two-wheelers | 104,829 | 42,415 | 62,414 | 147% |
| Three-wheelers | 44,609 | 24,099 | 20,510 | 85% |
| Passenger vehicles | 7,443 | 2,961 | 4,482 | 151% |
| Light commercial vehicles | 160 | 44 | 116 | 264% |
| Heavy commercial vehicles | 0 | 217 | -217 | -100% |
| Buses | 247 | 165 | 82 | 50% |
| Others | 23 | 0 | 23 | NA |
| Total | 157,311 | 69,901 | 87,410 | 125% |
