Sales of electric vehicles in August decline 13% to 156,199 units

But, despite this decline, August sales still represented the third-highest monthly total this year, following March and July

Electric vehicle (EV) sales increased by 22.8 per cent year-on-year with 156,199 vehicles sold in August. A total of 127,206 vehicles were sold in August 2023, reflecting a significant growth in EV adoption over the past year.

The sales, however, declined by nearly 13 per cent in August compared to July this year, primarily due to a high base effect and potential buyers delaying purchases in anticipation of festive season offers and clarity on government incentives.

“Sales are down due to a high base. Original equipment manufacturers (OEMs) are hesitant to invest without clear government policy on subsidies, and customers likely postponed their purchases to capitalise on potential subsidies,” said Preetesh Singh, Specialist in CASE and Alternative Powertrains at NRI Consulting & Solutions.

 

Samkit Shah, co-founder of Jitendra EV, an electric two-wheeler manufacturer, noted that customers were also waiting for the festive season.

“In India, the festive months are critical for vehicle sales. Consumers are more inclined to make significant purchases during this time, seeking discounts and favorable conditions. Studies indicate that many consumers adopt a 'wait-and-watch' approach, especially regarding EVs, until these festive months start in September, October, and November,” Shah said.

Despite this decline, August sales were still the third-highest monthly total this year, following March and July, which saw 213,000 and 178,900 vehicles sold, respectively, according to Vahan data from the Ministry of Road Transport and Highways.

The top five players collectively sold 81,824 vehicles in August: Ola Electric led with 27,517, followed by Bajaj Auto with 20,736, TVS Motor with 17,613, Ather Energy with 10,830, and Mahindra Last Mile Mobility with 5,128 vehicles. Overall, vehicle sales surpassed the 1.23 million mark in the first eight months of 2024.

Industry executives remain optimistic about the rest of the year, citing growing acceptance of EVs among consumers.

“Despite the current challenges, the market for EVs is expected to grow as consumer attitudes evolve,” Shah said.

The monthly sales have decreased four times this year. February saw a slight decline of 2.3 per cent compared to January figures, June experienced a minor dip of 0.5 per cent as against May numbers, and April recorded the most significant drop of 45.6 per cent compared to March. In August, sales declined by 12.7 per cent.

Both the highest sales and the sharpest declines this year occurred in the months following specific policy changes. In May last year, sales peaked after a government announcement to reduce the maximum subsidy under the Faster Adoption and Manufacturing of Electric (and Hybrid) Vehicles (FAME) scheme for electric two-wheelers from around Rs 60,000 to Rs 22,500, effective from June 1. This policy shift led to a surge in sales in May, followed by a 35 per cent drop in June.

This year, sales declined following the end of the FAME subsidy on March 31 and the introduction of the Electric Mobility Promotion Scheme (EMPS) 2024, which further halved the subsidy, resulting in the steepest decline of the year.

The industry’s highest-ever sales were recorded in March. The EMPS scheme was originally set to expire on July 31, but a government notification on July 26 extended the deadline by two months. Experts suggest that many customers decided to purchase before this extension was announced.