Electric two-wheeler sales near pre-slashed FAME subsidy levels
The electric two-wheeler industry in India is closing in on the monthly sales it used to make before the FAME subsidy was reduced by 25% in June 2023 with approximately 64,000 units sold in September. This trend indicates the market’s gradual maturation as consumers are increasingly purchasing EVs at higher rates.
Retail sales of electric two-wheelers in India are beginning to approach levels of monthly sales seen in the first four months of the year, four months after the reduced-by-25% FAME subsidy went into effect on June 1, 2023. In India, almost 64,000 electric motorcycles and scooters were purchased in September 2023.
Over 225,000 new electric two-wheelers have been bought between June-September at higher prices, following the reduced subsidy and indicate a gradual maturing of the Indian EV market on two wheels.
It should be emphasised that the May 2023 record sales of 105,511 units were an anomaly since customers hurried to make purchases before the June 1 deadline. According to retail sales data published on the Vahan website of the Indian government, 63,857 electric vehicles with two wheels were sold in September 2023, which is 1,158 higher than the 62,699 units sold in August 2023 and 9,281 more than the 54,576 units sold in July 2023. It may be recalled that in June 2023, after the FAME subsidy was reduced by a fourth, e-two-wheeler sales plunged to an 11-month low of 46,060 units.
While the year-over-year increase has recovered to double digits after hitting a low of 4% in June, the month-to-month growth is just modest, coming in at 1.84% in September 2023. The YoY sales growth in July (up 17%), August, and September (up 20%) shows that there is still a high demand for electric bikes and scooters.
Sales during the first nine months of CY2023, which totaled 616,673 units, were 49% higher than those for the same period in 2022 (412,557). At the end of September 2023, total EV sales were just 14,501 units short of the 631,174 units in retail sales for the full calendar year 2022, a number that will be reached in October.
With three months to go for this year to come to a close and the festive season continuing with Navratri (October 15-24) and Diwali (in November), it can be surmised that the Indian electric two-wheeler industry could close CY2023 with total sales in the region of 750,000 to 800,000 units, which translates into 18% to 25% YoY growth.
OLA LEADS WITH 29% MARKET SHARE, TVS’ SHARE RISES TO 24%, ATHER ENERGY & BAJAJ AUTO TIED AT 11%
The top six EV manufacturers in India’s fiercely competitive e-two-wheeler market have sold more than 1,000 units each, while the top two manufacturers, Ola Electric and TVS Motor Co., have each sold more than 15,000 units, according to a detailed analysis of the Vahan retail sales data. These top six OEMs collectively sold 53,829 units in September, accounting for 84% of all industry retail sales. As a result, the remaining 155 competitors had to compete for the remaining 16% of the market.
With sales of 18,664 units in September, market leader Ola Electric has a dominant share of 29 percent, albeit this results in level sales since its August numbers were comparable at 18,725 units (see detailed Top 25 EV OEMs table for September 2023 below). Expect Ola Electric, which recently launched its refreshed S1 series of e-scooters and has already garnered over 75,000 bookings, to clock in excess of 20,000 units a month soon given that the festive season will really pick up from mid-October.
TVS Motor Co. increased its market share from 19% in July to 24% in September with 15,558 units, a significant gain from the 14,473 units it had in August 2023. This is a slight 1% month-over-month improvement (August 2023: 14,558). TVS had sold 118,518 units so far this year, surpassing the milestone of 100,000 units. The TVS iQube electric scooter passed the 200,000 sales mark in September 2023, 45 months after its launch in January 2020. At a large event in Dubai in August, the business introduced its brand-new, high-end EV flagship, the TVS X, with a starting price of Rs 250,000.
Ather Energy, a smart e-scooter OEM based in Bengaluru, is maintaining its podium position in third place with 6,835 units, which represented flat sales compared to August 2023’s 7,130 units. One of the EV OEMs acting to provide potential consumers with simple financing is Ather Energy. A month or so after launching a 60-month loan product with monthly EMIs as low as Rs 2,999 in partnership with IDFC First Bank, HDFC Bank, Hero FinCorp, Bajaj Finance, Axis Bank, and Cholamandalam Finance, the company announced in July that it would provide 100% on-road financing for its e-two-wheelers.
Bajaj Auto sold 7,083 units in September, up 8% from the 6,576 units it sold in August. The company has significantly increased Chetak scooter production while simultaneously growing its network. After the best-yet 9,983 units in May 2023, this is Bajaj Auto’s second-best monthly result. It’s interesting to note that Bajaj Auto and No. 3 OEM Ather Energy both had an 11% market share in September 2023.
Due to a 23% rise in month-over-month retails to 3,604 units (August 2023: 2,925 units), its greatest monthly sales in the year to date, Greaves Electric Mobility, which was placed sixth in July, maintains its fifth rank in September as well. Ampere Vehicles, Greaves’ sibling EV division, is ranked 13th with September sales of 585 units, down 24% on August 2023’s 773 units. Combined sales of the two EV divisions would add up to 4,189 units, which still puts in fifth position.
With 1,789 units, Okinawa Autotech drops to No. 6 overall, an 11% month-over-month decrease. Given that the company started CY2023 with 4,408 units in January, it is obvious that sales have slowed down.
Bgauss Auto, which sold 934 units—11 more than it did in August—is in sixth place. Revolt Intellicorp, a manufacturer of electric motorcycles, has climbed to eighth place for September 2023 with 887 units, up 73% from August 2023’s 514 units. The ninth- and tenth-placed brands are Okaya EV (884 units, down 11% MoM), and Hero Electric (843 units, up 8% MoM).
Many OEMs, including KLB Komaki, Quantum Energy, and Kinetic Green, are experiencing demand from last-mile delivery companies eager to profit from the low total cost of operation, which makes optimised business sense for a commercial operator.
Of the Top 25 e-two-wheeler OEMS, eight have recorded a month-on-month retail sales decline as seen in the data table below. Two OEMs – Lectrix EV and Wardwizard Innovations – though have delivered a strong performance. While Lectrix EV sold 735 EVs on record 250% MoM growth albeit on a low base of 210 units in August, Wardwizard sold 689 e-scooters to post 31% MoM growth.
GROWTH FORECAST
Despite the positive sales momentum in September, the shraadh period (September 29–October 14) is projected to cause a modest decline in sales across the automotive industry in October 2023. Having said that, the holiday season, which had started with Onam on August 29, will start up again with Navratri on October 15 and last until Diwali in the middle of November, when there is often a spike in consumer activity and new car purchases.
Growing demand for cargo-transporting electric two-wheelers is being seen in metropolitan India as well as in towns and the countryside, and certain OEMs are profiting from bulk purchases. Increased economic confidence, a booming stock market, unchanged high pricing for fossil fuels, and OEMs offering sweetened new product deals in the festive season to capture the growing consumer shift to EVs should see India EV Inc maintain its growth path.