Electric two-wheeler sales in July cross 54,000 units, improve on tough June by 18%

August has dawned and brings with it the news that sales of electric two-wheelers in India, which had plunged 56% in June 2023 following the slashing of the FAME II subsidy by 25%, have picked up again . . .

After Autocar Professional’s intial report on July 2023 sales (on August 1), which was based on 51,299 electric scooters and bikes and 11.55% better than June’s 45,984 units, the government’s Vahan website has seen an update in sales numbers as of August 2 (8pm) as additional new vehicle registrations of 2,973 units from across the country have been factored in. 

The updated e-two-wheeler retail sales for July are 54,272 units, which constitutes an 18% month-on-month increase over June’s 45,984 units and 16% year-on-year growth over July 2022’s 46,607 units (see data table below).

100,256 EVs sold in June and July 2023 at higher prices following reduced FAME subsidy points to a maturing of the market..Cumulative sales in first 7 months of 2023 already 78% of total sales of record 631,169 units in CY2022.

From a macro perspective, the Indian electric two-wheeler sector continues to record growth, both calendar year-wise and fiscal year-wise. In the January-July 2023 period, a total of 489,622 units were sold, which constitutes 59.51% YoY growth (January-July 2022: 306,947 units).

In the first seven months of CY2023, 489,622 units were sold, up 59.51% YoY growth (January-July 2022: 306,947 units). This means that cumulative e-two-wheeler sales in the first seven months of CY2023 are already 78% of total retail sales of the record 631,169 units sold in CY2022 in India. With another five months to go and the festive season coming up, it can be surmised that the industry could close CY2023 with total sales in the region of 750,000 to 800,000 units. 

Ola, TVS, Ather, Bajaj, Greaves, Hero Vida log month-on-month growth in July

A detailed look at the Vahan retail numbers reveals that of the 148 electric two-wheeler OEMs in the fray, most of the leading players have logged month-on-month growth, with their July sales bettering their June 2023 retails. The top seven OEMs, each having sold in excess of 1,000 units last month, account for 46,133 units or an overwhelming 85% of total sales in July 2023. Of the top 25 EV makers, 18 have registered month-on-month gains while seven have seen a decline (see Top 25 EV OEMs retail sales table below).

Leading the charge is market leader Ola Electric with 19,256 units, which is a 9% increase over its June 2023’s 17,625 units and gives it a market share of 36 percent. Ola Electric continues to have a massive lead over its rivals in the ongoing fiscal year – its April-July 2023 total at 87,611 units is 40,243 units ahead of the No. 2 EV OEM,

TVS Motor Co sold a total of 10,338 iQubes, up 31% on June’s 7,857 units, and gets a 19% market share last month. If one doesn’t factor in the record May 2023 sales for TVS or other OEMs, then the July numbers are the best monthly sales for TVS in the first four months of FY2024, after April (8,758) and June (7,856). Cumulative April-July 2023 sales are 47,368 units. With this performance, cumulative sales of the TVS iQube have crossed the 150,000 milestone in the domestic market since the e-scooter’s  launch in January 2020.

In third place is Bengaluru-based smart e-scooter OEM Ather Energy which sold 6,614 units last month, a 44% improvement on June’s 4,598 units. Bajaj Auto, which has ramped up production of the Chetak scooter and is also expanding its network, sold 4,090 units, up 36% on June’s 3,002 units.

While Okinawa Autotech, ranked fifth, sees its sales decline by 13% to 2,263 units, Greaves Electric Mobility with 2,158 units betters its June sales by 50 percent. However, its sister concern Ampere Vehicles, with 1,414 units, witnesses a 12% MoM decline. Meanwhile, Hero MotoCorp, with 988 Vidas sold, more than doubled its June performance with a 112% MoM increase in sales (June 2023: 465 units) and has gone past Hero Electric (778 units in July 2023) for the first time. 

Maturing of the Indian e-two-wheeler market

While the June 2023 sales were a harsh reality check for OEMs, who were extremely bullish about demand continuing to extend across 65,000 units a month, the 18% month-on-month improvement in retail sales in July 2023 point to a maturing of the e-two-wheeler market in India.

The fact that over the past two months, over 100,000 buyers – 100,256 – have chosen to purchase an eco-friendly, zero-emission two-wheeler, despite the reduced-by-25% FAME subsidy which has resulted in a higher product price, indicates that the EV consumer is willing to spend more to benefit from a wallet-friendly EV compared to a petrol-engined scooter or motorcycle.

Given the likelihood of the FAME subsidy scheme not being extended, OEMs and EV buyers will have to contend with the fact that market dynamics will take over even as OEMs and their component and technology supplier ecosystem are hard at work to reduce developmental and product costs to enhance EV affordability compared to IC-engined two-wheelers.

The Ministry of Heavy Industries-formulated five-year Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) Scheme, with a total budgetary support of Rs 10,000 crore, comes to a close on March 31, 2024. Till July 20, 2023, all of 740,722 electric two-wheelers have been sold under FAME India Phase II.

Companies are also working on developing lower-cost versions of their popular EVs. For instance, it is learnt that TVS Motor Co is working on a lower-priced iQube which, while it is already priced lower than its key rivals from Ather, Bajaj Auto or Ola Electric, would mean use of a smaller battery pack and possibly fewer features.  

As in the petrol-engined two-wheeler market, stiff competition for the EV buyer will result in OEMs rolling out newer and improved products, with focus on the latest technologies and higher riding range. There will also be some OEMs which will develop variants with optimised features to drive down costs but with lower sticker prices.

While the July retail numbers, as were the June sales, are a real-world reality check for e-two-wheeler makers, the fact is that the EV story is here to stay as a value proposition in terms of mobility. While the rate of growth of personal EV buying has slowed down substantially compared to six months ago, sustained demand from last-mile delivery operators for electric two-wheelers from across the country should keep the momentum going in the current market scenario. Monthly sales numbers should improve in a couple of months. After all, the festive season is not too far away. Stay plugged in for further industry updates.

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