The electric two-wheeler vehicle sales are nearing the one million mark with FY2023-2024 recording 8.51 lakh electric two-wheeler registrations in India.

According to Vahan data, which tracks vehicle registrations in the country, in FY2022-2023, 7,25,297 electric two-wheelers were registered as compared to only 2,50,219 electric two-wheelers registered in FY2021-2022.

The electric two-wheeler sales saw growth despite the reduction in FAME 2 subsidy in 2023. The electric vehicle sales, which saw a drop in June after the subsidy was reduced, witnessed a pick up from August 2023 with over 91,852 electric two-wheelers registered in November.

The electric two-wheeler prices could increase with the extension of the FAME 2 subsidy getting over on March 31. Market rating agency ICRA expects the penetration levels of e-2w to reach 6-8 per cent in FY2025.

“The Government’s announcement to offer incentives under a new scheme for e-2Ws and e-3Ws will continue to provide a disruption-free environment for e-2W OEMs just before the FAME-II scheme was about to end. OEMs will continue to strive to offer competitive products by leveraging their cost structure through localization of key components and value engineering capabilities. The long-term potential for the e-2W segment remains favourable aided by a) improving cost of ownership vis-à-vis ICE vehicles and b) enhanced customer confidence about range anxiety, financing avenues, and other vehicle attributes such as safety. In addition, the Government’s focus on promoting electric vehicles through various initiatives (including PLI) will continue to drive electric vehicle adoption over the medium term. ICRA expects penetration of e-2Ws to inch to 6-8 per cent in the overall industry by FY2025 compared to approximately 5 per cent at present,” said Shamsher Dewan, Senior Vice President and Group Head – Corporate Ratings, ICRA.

businessline had earlier reported that electric two-wheeler companies are looking at prices to increase by 25 per cent with the FAME 2 subsidy gone, and would focus on the premium vehicle segment.

Further, a BloombergNEF report states that even though the total cost of ownership of electric vehicles is lower it might not be able to drive electric vehicle adoption. “There are some additional risks and uncertainties that could prompt consumers to push back on their EV purchases by a few years and choose an ICE vehicle instead. Greater availability of robust after-sales infrastructure and services, an adequate charging network and access to affordable vehicle finance are required to alleviate the most pressing customer concerns around EVs,” mentions the report.

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