Electric 2-wheeler Sales Grew 33% Last Fiscal Despite Policy Challenges

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Despite facing policy uncertainties, reduced government subsidies, and legal challenges, there was a shift in market share rankings. This shift propelled smaller players to leading positions, pushing some former market leaders to the sidelines, and contributed to the overall market’s healthy growth.

The electric two-wheeler industry faced policy fluctuations last fiscal but still grew by nearly a third. According to the Vahan portal, sales reached 910,930 units in 2023-24, up from 682,937 units in 2022-23, marking a 33.3% increase.

Despite policy uncertainties, subsidy cutbacks, and legal challenges, there was a reshuffling in market share rankings. Smaller players rose to the top, while some leaders were pushed to the sidelines, fueling overall market growth. Much of this growth was driven by significant discounts offered by manufacturers as subsidies decreased and inventories piled up. Additionally, the expansion of distribution networks by traditional two-wheeler manufacturers led to a surge in sales due to increased availability and attractive discounts.

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Ola Electric solidified its leadership by nearly doubling its sales to over 300,000 units. However, companies like Okinawa, Hero Electric, and Ampere saw a sharp decline in their numbers due to subsidy rollbacks and policy uncertainties. On the other hand, traditional two-wheeler companies like TVS Motor Company, Bajaj Auto, and Hero MotoCorp made significant gains in market share.

The new Electric Mobility Promotion Scheme 2024 (EMPS) introduces subsidy cuts and requires fresh registration for vehicles and manufacturers, valid for only four months. The industry’s major concern is the recertification mandate, which could have been avoided by extending the validity of vehicles already certified under previous schemes. The certification process has been problematic in the past, with allegations of subsidy misappropriation and issues with localisation levels.

The future of vehicles manufactured in March but unsold by the end of May remains uncertain, as they may not qualify for subsidies under the new scheme. The cost of manufacturing has decreased due to economies of scale and reduced battery prices, leading to a gradual reduction in subsidy amounts. The industry is in talks with the government for continued subsidy support, while traditional OEMs have outpaced pure electric manufacturers due to their distribution and marketing capabilities. It is yet to be seen whether the discounts offered last fiscal will persist as the policy situation unfolds.

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Aryaman Raghuvanshi
Aryaman Raghuvanshi
Aryaman Raghuvanshi is a Journalist at EFY. His passion is to explore the future of mobility, which gets him to cover latest technologies shaping the future of automobiles and EVs. But, at times he writes on broader technologies too. LinkedIn: https://www.linkedin.com/in/aryaman-raghuvanshi-2431b7153

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