Post the reduction of FAME subsidies, the electric two wheeler market has started to consolidate in favour of larger players, says Rakesh Sharma, ED of Bajaj Auto. Speaking to media post the Q2 FY24 earnings call, Sharma explained that earlier top five two-wheeler makers accounted for 50 percent of industry volumes, today about 75 percent of electric two-wheeler volumes come from the top 5 players. 

"There was a very long list of players at the bottom - either they are not able to meet government regulation or they have got weakened, that subsidy has been reduced and the products have become expensive, there has been a severe hit on them. The penetration has remained 5 percent steady - it is consolidating in favour of the larger players," said Sharma. 

Post the reduction of FAME benefits and the resultant price increase, the monthly volumes have been averaging around 65,000 units per month.

"There has been a slowdown, the penetration of electric two-wheelers as a percentage of total two-wheeler sales has remained at around 5 percent for three months now," said Sharma.

He expects that the volumes and penetration may improve on account of festivity in the coming 30-45 days, then there may be a correction, before the year end and then again there may be a spurt in buying in Q4 of FY24 due to pre-buying ahead of FAME scheme runs out.

"The market is likely to be topsy turvy and it will be hard to gauge what will be the penetration for the next 6 months. The penetration going ahead will be dependent on the quantum of benefits under the new FAME scheme," he said.

On its part, Bajaj Auto claims that the brand has been witnessing good traction in the market place and already Chetak has grabbed about 10 percent market share in the month of September, more than double its previous year's average.

The company has been selling Chetak in 141 cities across the countries, this will be expanding to 250 cities by March. On the product front as well, the company plans to expand the lineup and flank its existing model with multiple variants.

"We will be launching a new model post-festive season under the Chetak family, post that every quarter you will see something new on Chetak every quarter. By the same time next year, we will have a decent portfolio and reach to grow the EV business," said Sharma.