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Electric Two-Wheeler Sale drops by Fourth in April: VAHAN Data
In this article, we will discuss about how and why the electric two wheeler saw a decline in sales in the month of April
Somsubhra ChowdhurySomsubhra Chowdhury2-May-23 1:56 PM
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Electric Two-Wheeler Sale drops by Fourth in April: VAHAN Data

According to data from VAHAN, registrations of electric two-wheelers in India decreased significantly in April, falling by nearly a fourth to 62,581 from 82,292 in March. Companies like Okinawa, Hero Electric, Ather Energy, and TVS have all seen their registrations fall in the first four months of this year as a result of the government's punitive action against electric two-wheelers.

Ola Electric, on the other hand, has been an exception, registering 21,560 units in April, the company's highest total for the year. Consequently, the electric two-wheeler pecking order has undergone some interesting shifts, with Ampere taking Ather's spot in the third spot and Bajaj Auto and Chetak Technologies moving up to the top five from sixth place in March.

The Department of heavy industries (DHI) took punitive action against Hero Electric and Okinawa in response to a whistleblower complaint, which resulted in a decline in sales for the majority of electric two-wheeler manufacturers. The two businesses are the subject of an audit for failing to meet the 50% localization requirement for their scooters, which is required to qualify for subsidies.

The aggregate registrations of Hero Electric and Okinawa saw an emotional 43 percent drop in April over Spring, and their portion of the complete electric scooter market has now dropped to a simple 10 percent. This represents a significant decrease from their 2022 market share of nearly 31%. Industry suggests that almost Rs 1,200 crore of subsidies are stuck over this issue, with its heft being owed to these two players.

The DHI's activity could genuinely affect the main concerns and working capital of these two organisations in the event that it isn't challenged, as they have previously paid the subsidies to clients that are fully expecting distributions. Hero Electric CEO Sohinder Gill thinks that media reports about the possibility of the company being asked to return the subsidy could lead to dialogue and a solution rather than the 15-month deadlock.

According to Gill, late entrants such as Ola, Bajaj, TVS, Kinetic, and Okaya have benefited from the supply chain's gradual growth. However, these two businesses are not the only ones affected by the DHI's actions. It has also withheld subsidies from Ather, Ola, TVS, and Hero Motocorp for allegedly violating subsidy regulations by charging customers separately for a charger accessory instead of including it in the ex-factory price.

Ather Energy saw a 37% decrease in registrations to 7,675 in April, and TVS saw a nearly 50% decrease in registrations to 8,718 in April, despite the fact that the issue is currently being resolved.

As the market for electric two wheelers keeps on developing, the effect of these administrative activities on the business will be huge. The development for these vehicles has been driven to some extent by government subsidies and incentives, which have made them more reasonable for buyers. Notwithstanding, the new audit investigation and subsidy withholdings have made vulnerability and might actually obstruct the development of the business for the time being.

Some businesses have been able to weather the storm and even maintain their growth in spite of the difficulties the industry has faced. Ola Electric, for example, has seen an expansion in enrollments in April, avoiding the pattern seen by different organisations. The organisation has had the option to profit by the developing interest for electric vehicles and its imaginative plan of action, which incorporates an organisation of charging stations and membership based proprietorship.

Companies will need to find ways to comply with the localization requirement and other subsidy norms as the industry progresses and adapt to the shifting regulatory environment. In addition, they will need to concentrate on developing a robust supply chain and ensuring that customers can purchase their products at reasonable prices.

In conclusion, the electric two-wheeler industry in India has been significantly affected by the DHI's recent regulatory actions. While some businesses have performed admirably in this setting, others have struggled and are now uncertain about their prospects. Companies will need to be able to overcome these obstacles and come up with strategies for establishing a long-term business that is both profitable and sustainable as the sector continues to expand and change.

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