The impact of subsidy reduction on Electric Vehicles has started showing its results. The dream run for India’s electric two-wheeler sector came to an end this month, threatening to stall the government’s aim to electrify the world’s largest scooter and motorbike market. Electric two-wheeler registrations plummeted in June 2023 as purchasers held back their purchases following a 15-18% price increase when the union government reduced the subsidies.
According to data available on the Vahan automobile registration system, the registration of electric 2-wheelers decline to 35,461 units, the lowest in 16 months, as of June 27. Based on the current daily volume run of 1,363 units and adjusted for the remaining four days, June’s sales volume is projected to be around 40,000-40,500 units.
This would imply a 61% decrease month over month. The decline is anticipated to be 47% based on the previous five-month average (Jan-May) of 77,728 units.
Sales of electric two-wheelers decreased to 1,363 units per day in June, down from 3,391 in May, when sales were boosted by buying ahead of a reduction in subsidy amount under the FAME plan, which aims to promote EV adoption.
Ravneet S Phokela, chief business officer at Ather Energy, said: “We were anticipating a negative impact, though the drop is slightly more than expected.” Its volume contracted 35-40% compared with last month, but it expects sales to pick up next month.
Sohinder Gill, director-general of the Society of Manufacturers of Electric Vehicles, said: “We may be heading for only 60% achievement of the 2.3-million-unit target set by the Niti Aayog due to the subsidy blockage getting accentuated.”
Content credit: ET Auto
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