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Passenger vehicle’s year-over-year sales increase by 131% despite overall drop in EV sales
The change to the FAME 2 subsidy, which resulted in a decline in the demand for electric
two-wheelers
and, as a result, a decline in total volumes, caused a major decline in the sales of electric vehicles in the month of June. However, sales of electric passenger vehicles (ePVs) were unchanged month over month in June but increased by 131% year over year. From 2% last month to 1.8% this month, the percentage of electric vehicle sales in total passenger vehicle sales declined marginally.The change in the subsidy still holds optimism because this is truly a "course correction" and retail sales are in line with what the government had predicted.
Around 45,759 electric two-wheelers were sold last month, with Ola Electric accounting for 17,579 units sold, or 31.3 per cent of the market, followed by TVS Motor Co. with sales of 7,807 units, or 17 per cent of the market, and Ather Energy coming in third with 4,543 units sold or 12.7 per cent of the market.
Additionally, one must be aware that many pre-purchases occurred in May when retail customers took advantage of greater FAME 2 subsidies; as a result, the decline in June volumes cannot be interpreted as an indication of real demand.
According to research by BNP Paribas, sales could increase over the next few months as customers adjust to price increases and OEMs perhaps provide more affordable models. According to the report, EV penetration for electric three-wheelers and electric passenger cars marginally decreased monthly, while volume remained consistent.
According to the study, Delhi had the greatest decline in the penetration of electric two-wheelers, which fell to 6.3% in June from 9.5% in FY2023. In the two-wheeler retail sector, both TVS Motor Company (3.4%) and Bajaj Auto (1.8%) saw a considerable month-over-month decline in the EV mix. It anticipates that June's e2W penetration will be at the bottom and stabilise around these levels before recovering once OEMs release more affordable models, which should be the subsequent encouraging development for the sector.
In June, MG Motor India increased its monthly volume share from 7 per cent to 16 per cent, while Tata Motors saw a decline from 77 per cent to 66 per cent. Across the main states, the volume increase was uneven, with Karnataka reporting the highest monthly sales of electric vehicles. As of the first quarter of FY2024, ePV penetration increased to 1.8%. Kerala made the biggest gain in terms of penetration, with a penetration rate of 6.4 per cent compared to 2.3 per cent in FY23. In June, Tata Motors' EV mix in the PV market marginally declined to 12 per cent. It claims that new model releases, most of which should occur in the second half of FY2024, continue to be a significant positive stimulus for EV penetration.