In 2023-24, sales of electric two-wheelers surged, with Ola Electric leading the charge. Prominent manufacturers such as TVS Motor and Bajaj Auto also made considerable progress. Although some OEMs faced obstacles, the introduction of the new EMPS seeks to encourage EV adoption through reduced subsidies.
In the financial year 2023-24, electric two-wheeler (e2w) sales witnessed a substantial increase of 33.3% year-over-year, with a total of 910,930 units sold, up from 682,937 units in the previous fiscal year, according to data from the Vahan portal. Ola Electric emerged as a dominant player, accounting for nearly one-third of all e2w sales in India during the last fiscal year. The company’s sales nearly doubled from over 1.5 lakh units in FY23 to over 3 lakh units in FY24.
Ola Electric mentioned that the previous year was noteworthy for both the company and the electric vehicle (EV) industry. They led the market throughout the financial year, witnessing steady growth in volume and market share. With nearly 1.20 lakh registrations in the fourth quarter of FY24, the company highlighted the robustness of its scooter portfolio. Ola Electric aims to maintain this growth momentum and further contribute to India’s electrification journey.
Legacy two-wheeler manufacturers such as TVS Motor Company, Bajaj Auto, and Hero MotoCorp also made significant gains in market share during FY24. TVS rose to the second position with nearly one lakh additional units sold, capturing a fifth of the market share. Hero MotoCorp experienced exponential growth, with sales increasing from under 1000 units in FY23 to over 17,000 units in FY24. Bajaj’s e2w sales also saw a substantial rise, crossing the one lakh unit mark in FY24. Ather, another key player, recorded impressive growth, surpassing the one lakh unit mark and competing closely with Bajaj in sales figures.
However, other major e2w OEMs like Okinawa, Hero Electric, and Ampere faced challenges in FY24, with their sales numbers declining significantly due to subsidy rollbacks and policy uncertainties.
In response to the end of the FAME scheme on March 31, the government introduced the new Electric Mobility Promotion Scheme 2024 (EMPS), effective from April 1. The EMPS offers lower subsidies than its predecessor, with a four-month validity until July 31 and an outlay of INR 500 crore to provide subsidies for approximately 3.72 lakh electric two and three-wheelers. Under the EMPS, two-wheelers are eligible for a subsidy of INR 5000 per kWh, capped at INR 10,000 per vehicle, with a maximum factory price of INR 1.5 lakh. However, there are uncertainties regarding the eligibility for subsidies of vehicles manufactured in March but not yet sold, and EV manufacturers have raised concerns about the recertification process required by the scheme.
Nikhil Bhatia, Co-Founder and COO of HOP Electric Mobility, remarked that the new EMPS 2024 scheme addresses industry uncertainty for four months. However, he suggested that re-certifying vehicles could have been avoided by extending the certification of those already approved under the previous scheme. Bhatia expressed hope for a swift recertification process, considering the scheme’s limited validity.
In 2022, 13 e2w manufacturers faced penalties and subsidy reimbursement denials from the government due to allegations of subsidy misappropriation related to insufficient localization levels. Investigations also revealed discrepancies in the certification process. An industry executive noted a significant reduction in manufacturing costs attributed to economies of scale and declining prices of critical components like batteries. Currently, batteries account for only a third of two-wheeler production costs, down from half in previous years. The subsidy amount has been progressively reduced from 45% of the vehicle cost or INR 30,000 per kWh to INR 15,000 per kWh, and now to INR 5,000.
