2023 EV wrap: All updates of Indian EV industry

India isn't far behind the rest of the globe when it comes to utilising green energy to lessen its carbon impact. It looks like the nation is making every effort to reach its net zero emission targets. 

The effort is evident in the nation's adoption of electric vehicles (EVs), which has increased by almost 50% this year. Data from Vahan as of December 29 indicates that the number of electric vehicle registrations in the nation increased from 10.25 lakh units in 2022 to 15.13 lakh units in 2023.

Two-wheelers are still at the forefront of the EV market. In 2023, the number of two-wheeler electric vehicle (EV) registrations in the nation increased by 34% YoY to 8.49 lakh units.

This rise occurred in spite of the fact that the government fined original equipment manufacturers (OEMs) crores of dollars and that more than a dozen firms in the category were embroiled in FAME-II scandals. Therefore, if the FAME-II debacle had not occurred, the sales rise may have been substantially greater.

In the meanwhile, there was a significant consolidation in the market in 2023.

Even while sales of electric two-wheelers rose, just a small number of companies—either well-funded startups or established automakers—ruled the market this year.

For example, the IPO-bound Ola Electric, helmed by Bhavish Aggarwal, saw an over 140% increase in car registrations in 2023, from 1.1 lakh units to 2.62 lakh units. 

In the same vein, Ather Energy saw a more than threefold increase in its vehicle registrations to 1.04 lakh units this year after raising almost INR 1,000 Cr in new capital.

Conversely, an established participant in the two-wheeler market TVS Motors has become a prominent figure in the electric vehicle (EV) space this year, as its vehicle registrations have increased by 250% year over year to 1.65 lakh units by 2023. The number of EV registrations for Hero MotoCorp and Bajaj Auto increased significantly as well. 

Even though several of 2023's best players had a slow start to the year due to FAME-II scandals, they were able to pick up steam by August.

YoY sales increases were recorded by BGauss, iVOOMi Energy, Kinetic Green, Lectrix EV, and Okaya, among other names. 

But this year, the biggest names in the industry, such as Okinawa Autotech, PureEV, Hero Electric, Ampere, and electric motorbike maker Revolt, lost a lot of their allure.

Let's examine the performance of a few of the leading manufacturers of electric two-wheelers in 2023 as well as their month-to-month trends over the previous three months:

Nevertheless, even if the market for electric two-wheelers sold a record number of automobiles this year, the growth rate obviously decreased. Over 300% YoY, or 6.31 lakh units, more electric two-wheeler registrations were made last year. The increase was more than 400% YoY in 2021.

Citing some experts, Inc42 reported that one of the biggest obstacles to India's EV development narrative this year was the FAME-II subsidy problem. 

For example, earlier this year, Vinkesh Gulati, chairman of research and academy at the Federation of Automobile Dealers Associations (FADA), informed us that it is highly challenging to adhere to localization norms in a country like India, which is heavily dependent on imports of batteries and cells for EVs due to a lack of resources, raw materials, and infrastructure.

Gulati had stated that the FAME-II programme was the greatest way to boost sales, but that certain firms are currently put off by it.

The sector cannot develop by relying just on subsidies, other industry participants added at the time, and it was necessary to crack down on EV companies that acted more as importers of parts than as manufacturers of vehicles tailored to India's roads and climate.

What 2024 holds?

Increased government support for electric vehicles (EVs), technological advancements, and growing public awareness of the need to reduce pollution are all predicted to contribute to EV sales growth in 2024.

It is anticipated that wealthy entities capable of surviving without government assistance would prevail in this competition. Additionally, as support for the other sub-segments has grown, there may be a reduction in private investment for EV OEMs.

The electric two-wheeler market, which is now crowded with over 200 firms, may see consolidation moving ahead as technology improves and consumers choose higher-quality goods, according to the report by Inc42. 

The market for electric two-wheelers is now being entered by an increasing number of electric motorbike companies, which is expected to drive up sales of two-wheeler EVs in the upcoming years. 

While well-known brands like Royal Enfield are preparing for the debut of electric vehicles, other startups are also attempting to upend the Indian motorbike industry.

Several VC-backed businesses, including Ultraviolette, Orxa Energies, Matter, and Oben Electric, anticipate beginning or significantly increasing delivery of their electric bikes in 2024. Next year, Ola Electric also plans to introduce its line of electric motorcycles.

Mohal Lalbhai, the founder and CEO of Matter, stated in an interview that while there is a growing demand among motorbike riders to switch to electric vehicles, there is a shortage of quality, reasonably priced mass-market products, Inc42 reported.