Slashed subsidies to cause e-two-wheeler sales to ebb
₹22,000 per scooter to a maximum of ₹10,000 per scooter. This can lead to a price hike of ₹1,000-5,000 per scooter, where prices range from ₹80,000 to well over ₹1.5 lakh (ex-showroom).
However, FY24 clocked the slowest pace of electric two-wheeler sales growth since FY21—a 29.9% growth rate for sales of 941,745 units. Sales were hampered by a substantial subsidy cut last June—from 40% of a vehicle’s ex-factory price to just 15%.
(Sales had spiked 480% in FY21, thanks to the government doubling the cap on FAME-II incentives.) This time, too, industry watchers say the sector will have to grapple with a few months of lull before demand revives after March’s surge, prolonging a period of stagnation in electric vehicle (EV) penetration that kicked in in the second half of last year. Monthly data from the Vahan dashboard reveals that electric two-wheeler sales plummeted to 46,102 units in June 2023 from 105,390 in May, and recovered somewhat only in October to 75,069 units, when the festival season began.
Some EV makers have decided to absorb part of this subsidy cut. Bengaluru-based Ather Energy has decided to absorb a ₹5,000 per unit reduction in incentives, and pass on only ₹5,000 to the consumer.
Market leader Ola Electric, on the other hand, has tapered down discounts from 25% to close to 10% of the ex-showroom price of its models, even as it continues to offer its cheapest model, the S1X, at ₹80,000. Bajaj Auto and TVS Motor Co., the two largest incumbents in the e-two-wheeler market, are yet to announce new pricing under the Electric Mobility Promotion Scheme (EMPS) 2024, which is valid only for four months after April, until the Union Budget under the new government gives way to a fully fleshed-out incentive programme
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