Know Why two-wheeler EV sales Dropped by 60% in June 2023

Reduction in government subsidy hits India's electric two-wheeler market hard.

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In a recent article published by E-Vehicle Info, it has been revealed that the electric two-wheeler market in India experienced a sharp decline in sales during the month of June. After reaching record-breaking heights in May, sales plummeted by a staggering 61 per cent.

The sudden drop in sales can be attributed to the reduction of the FAME-II (Faster Adoption and Manufacturing of Electric Vehicles) subsidy on electric vehicles by the Indian government. This decision, made by the Ministry of Heavy Industries, has had a profound negative impact on the growth and sustainability of the electric two-wheeler market in the country.

Peak Sales in the Month of May

During the month of May, a surge in demand for electric two-wheelers was witnessed as consumers rushed to take advantage of the FAME-II subsidy before its reduction. As a result, the sales figures for May appeared promising and showcased an optimistic outlook for the industry. 

However, the subsequent reduction in subsidy led to a significant decrease in sales in the following month, reflecting the sensitivity of the market to government incentives.

Impact of Reduced FAME-II Subsidy

The reduction in the FAME-II subsidy has created a challenging situation for electric two-wheeler manufacturers and distributors. The affordability factor, which played a crucial role in attracting customers, has been compromised. As a result, the market has experienced a setback in terms of consumer interest and purchasing power, leading to the decline in sales witnessed in June.

We have covered the FAME Subsidy II in detail: Check out its rules, regulations, Incentive and Validity.

Affordability Factor and Consumer Behavior

Industry experts and stakeholders have expressed concerns over the future growth and sustainability of India's electric two-wheeler market in the wake of the subsidy reduction. They emphasize the need for continued government support and incentives to encourage the adoption of electric vehicles, which are crucial for reducing carbon emissions and combating climate change.

Concerns for the Electric Two-Wheeler Market

It remains to be seen how the government and industry players will respond to this setback. Nevertheless, the recent decline in electric two-wheeler sales serves as a stark reminder of the impact government policies can have on shaping the trajectory of the electric vehicle market.

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