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Pre-buying ahead of possible price increase led to record sales of electric two-wheelers, which drove monthly total EV registrations to more than 1.5 lakh units in May.
Total monthly electric two-wheeler sales crossed one lakh units for the first time and stood at about 1.05 lakh units in the month of May. Consequently, total sales of battery-powered vehicles (all segments put together) stood at 157,217 units, which is the highest-ever monthly number.
The E2W industry retail volume increase in May was aided by pre-buying ahead of likely price rises on account of the amendment announced for the FAME II subsidy scheme on May 21, 2023, said Rohan Kanwar Gupta, Vice President & Sector Head-Corporate Ratings, Icra.
The industry retails had declined to about 67,000 units in April 2023, with sales impacted to an extent by issues related to delay in subsidy disbursement and supply shortage. The recent amendment to the subsidy scheme, wherein the capping on-demand incentive and the incentive per kWh of battery size were lowered from the earlier levels, is expected to lead to a price increase.
The price increase may be in the range of ₹15,000-₹35,000 unit across E2W models. Given the material price rise, retails are expected to slow down over the near term, added Gupta.
Players’ responses
TVS Motor Company announced a price revision for its electric scooter iQube effective June 1, 2023. After the FAME II revision, iQube‘s price increase will be in the range of ₹17,000-₹22,000, depending on the variant,” according to Manu Saxena, Senior Vice President–Electric Vehicles, TVS Motor Company.
Greaves Electric Mobility (Ampere) has also announced a price hike in the range of ₹21,000 to 39,100 for its Magnux EX, Zeal Ex, and Primus. Ola Electric has also announced prices hikes for its e-scooters S1 Pro, S1 and A1 Air.
However, Hero Electric, a leading electric two-wheeler company, has already said that it would not increase the prices of its popular e-scooter models amid the cut in the FAME II subsidy for E2Ws.
While pre-buying has helped some players achieve record sales, some others reported a huge decline in volumes due to delays in subsidy disbursements and uncertainty looming over FAME II violations.
Ola Electric’s E2W registrations stood at 28,438 units during May 2023, up from 21,991 units in April 2023, while TVS Motor’s volumes stood at 20,254 units, up from 8,753 units. Ather Energy’s registrations grew to 15,526 units in May from 7,786 units in April, according to Vahan data.
Electric three-wheelers’ volumes stood at 44,610 units in May 2023 compared with about 38,000 units in April 2023.
Electric passenger vehicle sales grew to about 7,400 units in May this year, up from 5,980 in April and down from 8,804 units in March.
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