The sales of electric vehicles came down significantly in the month of June, thanks to the revision in FAME 2 subsidy which saw demand for electric two-wheelers reducing and thus leading to overall volumes coming down. But all hope is not lost, this actually is what one calls is ‘course correction’ and the retail sales are in-line with the government’s prediction.
Last month, around 45,759 electric two-wheelers were sold, with Ola Electric accounting for 17,579 units or 31.3 percent market share, followed by TVS Motor Co with sales of 7,807 units or 17 percent market share, Ather Energy came at third position with 12.7 percent market share selling 4,543 units. One also needs to understand a lot of pre-buy happened in May, as the retail consumers took advantage of higher FAME 2 subsidies, thus the drop in June volumes cannot be said to be a reflection of actual demand.
A report by BNP Paribas, expects sales to improve in the coming months with consumers absorbing the price hikes and OEMs potentially launching lower-priced models. It says while EV penetration for electric three-wheelers and electric passenger vehicles declined slightly on month-on-month bases, but the volumes were stable.
The report finds that the penetration of electric two-wheelers deteriorated the most in Delhi, and reached 6.3 percent in June from 9.5 percent in FY2023. The EV mix in the two-wheeler retail market significantly deteriorated month-on-month for both TVS Motor Company (3.4%) and Bajaj Auto (1.8%). It expects June’s e2W penetration to be close to the bottom and stabilise around these levels, before it starts recovering once OEMs launch lower-priced models, which should be the industry’s next positive catalyst.
In June, electric passenger vehicle (ePV) sales volume grew by 131 percent compared to last year, but was flat compared to a month before. The penetration of electric vehicles in the overall passenger vehicle sales deteriorated slightly to 1.8% from 2% last month.
In June, Tata Motors lost monthly volume share at 66 percent from 77 percent, while MG Motor India gained, reaching 16 percent from 7 percent. The Volume growth was mixed across the major states, with Karnataka posting the most number of electric cars sold on month-on-month basis. As of year-to-date FY2024, ePV penetration improved to 1.8 percent. In terms of penetration, Kerala saw the most progress – with penetration reaching 6.4 percent vs 2.3 percent in FY23. Tata Motors EV mix in the PV space slightly deteriorated to 12 percent in June. New model launches, most of which should be in second half of FY2024, it says remain a key positive catalyst to drive EV penetration.
