FAME-II Embarrass EV Terrific Adoption
India’s electric vehicle journey, as marked by FAME, hit a roadblock in May 2024. Sales plummeted by 22.3% compared to the previous year. Marking a significant downturn. While the numbers showed a slight 8.8% uptick from April, the overall trend remains concerning.
Vahan portal data reveals a stark picture: 123,107 EVs found buyers in May 2024. A far cry from the peak of 158,459 units sold in May 2023. This indicates a challenging period for the EV industry as it navigates evolving market dynamics.
EV Sales Lose Momentum in May
India’s electric vehicle market experienced a setback in May. Sales took a significant hit, declining by 22.3% compared to the same period last year. Although there was a marginal 8.8% increase from April, the overall trend is a cause for concern.
According to Vahan portal data, the industry witnessed a decline from the peak sales of 158,459 units in May 2023 to 123,107 units in May 2024. April’s sales of 113,092 units further highlight the slowdown in the EV sector.
EV Sales Skid: Experts Blame Policy, Hybrid Shift, and Elections
Industry experts point to a confluence of factors for the decline. Puneet Gupta, director of S&P Global, suggests that the “consumers, especially in fleet and business sectors, often postpone their purchase decisions until elections are over. Manufacturers also prefer to ramp up investments once a new government is formed. Additionally, the recent decline in sales could be attributed to the end of Faster Adoption and Manufacturing of Electric Vehicles (FAME) incentives and a shift in customer preference towards hybrids.“
EV Sales Cool Down Post-Peak
The meteoric rise of the Indian electric vehicle market saw a cooling-off period. Sales peaked in March 2024 at an astounding figure of 209,608 units and retreated to below the 145,000 mark thereafter. This downside comes as the government’s FAME scheme concluded in March.
Industry leaders are getting anxious over the future of the EV market. The possible sales surge may be delayed if the government does not come forward to continue the existing Electric Mobility Promotion Scheme or usher in a new FAME phase. In line with this, the road ahead for electric vehicles remains in a blur as the industry is waiting with bated breath for policy clarity.
EV Industry Seeks Clarity on Incentives
Industry experts say the future of the electric vehicle market in India is now dependent on how serious the government really is. The contingent withdrawal of incentives will, indeed, take a toll in the short term. At least up to when the much-touted production-linked incentives (PLIs) for the automobile sector start to drive in from April 1, 2025.
The recent announcement made by the Centre regarding the Electric Mobility Promotion Scheme (EMPS) 2024 for electric two-wheelers and three-wheelers has brought some relief. However, industry players are calling for continuing support for the sustenance of momentum in the sector.