Electric vehicle sales in India hit a speed bump in June, dropping 14 percent from May. Experts blame a combination of reduced government subsidies and rising interest in hybrid vehicles, but year-over-year growth remains positive
Sales of electric vehicles (EVs) in India saw a sharp 14 percent decline in June against May’s figure, with experts suggesting that it could be due to a combination of factors such as changes in government policies and people’s increasing interest towards hybrid vehicles.
However, it's important to note that the June 2024 sales were over 20 percent higher when compared to the same month last year when the sales had dropped due to government tweaks in subsidies.
This indicates a potential for growth in the EV market. Electric vehicle (EV) sales in June 2024 dropped by more than 14 percent to 106,081 units, compared to 123,704 units sold in May. This marked the lowest sales figure so far in the calendar year. Year-to-date, approximately 839,545 electric vehicles have been sold, constituting about 6.69 percent of the total 12,541,684 cars sold.
June has historically been a challenging month for EVs, both this year and last year. However, June 2024 saw a significant improvement, with 123,704 units registered, marking a 20.52 percent increase compared to the 102,645 units registered in June 2023.
This resilience of the EV market is a reassuring sign for stakeholders.
Last year, EV sales declined due to the Centre’s decision to reduce the maximum subsidy for electric two-wheelers (e2Ws) from approximately Rs 60,000 to around Rs 22,500. This move led to an increase of more than 20 percent in the average price of an e2W, which typically ranges from Rs80,000 to Rs1,50,000.
Following the government’s decision to cut the subsidy, most original equipment manufacturers (OEMs) raised their vehicle prices in the first week of June. This created a significant price gap between green vehicles and petrol-powered ones, thus impacting the purchasing decisions of potential buyers.
Electric two-wheelers (e2Ws) account for 57 percent of the 839,545 electric vehicles sold overall in 2024. Changes in e2W sales significantly impact the overall sales of the EV category.
This year, the government further reduced the subsidy by half in April with the introduction of the Rs 500 crore Electric Mobility Promotion Scheme 2024 (EMPS 2024). Under EMPS 2024, the subsidy cap for electric two-wheelers (e2Ws) is now Rs 10,000 per vehicle, down from Rs 22,500, while for electric three-wheelers (e3Ws), it has been reduced to Rs 50,000 from Rs 111,505. Both categories will receive incentives of Rs 5,000 per kilowatt-hour (kWh).
Industry executives are concerned that the anticipated increase in sales could be delayed if the government does not extend the deadline of its current Electric Mobility Promotion Scheme 2024 (EMPS 2024) or introduce the third phase of FAME.