Electric two-wheeler market crashes by 60% in June 2023.

Market overview

The electric two-wheeler market saw its first yearly drop since 2022 in June, as the government reduced the incentives under the FAME-II scheme, making the vehicles more expensive and less attractive to buyers.

Only 42,121 electric two-wheelers were registered in June, a 4.1% decrease from 43,919 units in the same month last year, according to the Vahan dashboard data from the government. Sales also plummeted 60% in June from May, when they reached a record high of over 100,000 registrations.

Market share

Ola Electric was the leader in electric two-wheeler sales in June, with 16,322 units sold and a 38.7% market share. TVS Motor Co. came second with 6,844 units and a 16.25% share, followed by Ather Energy with 4,191 units and a 10% share. Bajaj Auto and Okinawa Autotech sold 2,672 units and 2,475 units respectively. However, all the top electric two-wheeler makers witnessed sharp sales declines in June compared to May.

| Company | Units Sold in June | Market Share ||:----------------:|:------------------:|:------------:|| Ola Electric | 16, 322 | 38.7% || TVS Motor Co. | 6,822 | 16.25% || Ather Energy | 4,191 | 10% || Bajaj Auto | 2,672 | 6.34% || Okinawa Autotech | 2,475 | 5.87% |

Subsidy impact

It is important to note that electric two-wheeler makers anticipated a slowdown in sales in June as many customers bought their vehicles earlier to avoid the price hike due to lower government subsidies from 1 June. The average cost of electric two-wheelers in June was ₹15,000-30,000 higher than in May as the government cut down the subsidy support on electric two-wheelers to ₹10,000 per kilowatt hour and limited it to ₹22,500 per vehicle, from ₹15,000 per kilowatt hour subsidy capped at ₹60,000 or 40% of the ex-showroom price of a vehicle.

This was done because the government was running out of funds for subsidizing electric scooters by FY24, a target it was close to achieving till it denied incentives for scooters it found to have failed to meet the FAME-II eligibility criteria.

Without government subsidies, the price difference between electric scooters and conventional ones becomes bigger for customers.

Demand surge

The popular models were in high demand towards the end of May, resulting in dealers clearing out their stocks. Ather Energy, for example, ran extensive ad campaigns encouraging customers to buy or book vehicles at old prices before 1 June, while others such as Ola Electric allowed customers to book vehicles at old prices till 30 May.