EV two-wheeler sales dip 56% in June on FAME-II subsidy cut: Fada

The government’s decision to slash the FAME-II subsidy of electric two-wheelers has led to a fall of 56.3 per cent in its sales during the month of June, compared to May this year. However, on a year-on-year basis, it saw a marginal increase of 3.21 per cent, said data shared by the Federation of Automobile Dealers’ Associations (Fada) on Friday. 

Interestingly, the share of EVs in the overall two-wheeler sales for the month was seen at 3.5 per cent, compared to 7 per cent in May 2023 and 3.6 per cent in June 2022. “A 12 per cent month-on-month drop was observed in two-wheeler sales, with electric vehicle sales witnessing a 56 per cent in June compared to May, primarily due to the government reducing FAME subsidies, triggering extreme price hikes,” said Manish Raj Singhania, president, Fada. During the month of June 2023, electric two-wheeler sales were seen at 45,806 units, as compared to 104,829 units in May. In June 2022, this was seen at 44,381 units.

Among the industry majors suffered a loss in sales on a monthly basis with top player Ola Electric seeing a 38 per cent decline in sales from 28,469 units in May to 17,579 units in June (5,898 units in June 2022).  TVS Motor too saw a 61 per cent dip in monthly sales to 7,807 units from 20,261 units in May 2023, while it saw almost a three-fold rise in sales compared to 1,983 units in June 2022. Other two major players, Ather Energy and Bajaj Auto too saw a 70 per cent decline in sales compared to May.

Interestingly, Okinawa Autotech, Ampere Vehicles and Hero Electric saw its sales dipping both monthly and on an annual basis. Okinawa Autotech’s sales dipped 63 per cent on an annual basis and 10 per cent on monthly basis to 2,616 units. Similarly, Ampere Vehicles sales dipped 77 per cent annually and 83 per cent monthly to 1,601 units.

The Ministry of Heavy Industries (MHI) had decided last month to slash the FAME II subsidy of electric two-wheelers to Rs 10,000 per Kwh from the Rs 15,000 per Kwh. Apart from reducing the per Kwh incentive by Rs 5,000, the ministry also reduced the maximum subsidy cap of 40 per cent of the ex-factory price of the vehicle to 15 per cent. The move was likely to disrupt India’s growth in the electric vehicle segment.

Among the other segments, electric passenger vehicles saw a 140 per cent increase in sales annually and 4 per cent on a monthly basis to 7,730 units. This was compared to 7,437 units in May 2023 and 3,124 units in June 2022. In the segment, Tata Motors posted a 95 per cent rise in sales to 5,346 units and 8 per cent dip in monthly sales to 2,736 units.

In June, electric three wheeler sales increased by 8 per cent on a monthly basis and 71 per cent on annual basis to 48,009 units in June. During the month, electric commercial vehicles sales declined 9 per cent on a monthly basis and increased 86 per cent on an annual basis to 396 units in June. In the segment Tata Motors saw an eight-fold jump in sales and Mahindra Group saw over two-fold rise in sales on an annual basis.