TRENDING NEWS - E-scooters drive (EV) sales to record 1 mn units in FY23

With over 50% of the market share, the original equipment manufacturers (OEMs) dominated the E2W market and became the leading player in the sector.

The government withholding a subsidy worth roughly Rs 1,100 crore could result in electric two-wheeler sales falling 20% short of the target of 10 lakh units in the fiscal 2022–23 period, according to industry group SMEV.

Sales of electric two-wheelers will reach about 6 lakh units in 2022, according to the Society Of Manufacturers Of Electric Vehicles (SMEV), with three major manufacturers—Hero Electric, Ola, and Okinawa—crossing the limit for annual sales reaching one lakh for the first time.

With more than 50% of the market share, these original equipment manufacturers (OEMs) have become the dominant players in the E2W market.

Although the E2W industry's performance in 2022 appears promising, with sales of about 6 lakh units, "the volumes are not keeping up with the projections made by Niti Aayog and many other research agencies", according to SMEV.

According to the VAHAN portal, sales in December decreased by 28%, totaling only 59,554 units as opposed to 76,162 units in November. This raised a red flag for the industry.

According to SMEV Director General Sohinder Gill, sales for the nine months of the current FY23 that ended in December were about 5 lakh units, and "The NITI Aayog's projections of a million units for the entire FY23 could fall more than 20% short."

"Several factors, such as the blocking of Rs 1,100 crore plus subsidy of a large number of players for many months that have struggled the working capital of major OEMs, have contributed to the sales curve declining in the last two months of the year," the executive said.

More concerning, according to Gill, is the possibility that the slowdown, if it is not quickly addressed, could have a negative impact on the FY24 volumes, which are anticipated to be in excess of 2 million units.

Last month, Union Heavy Industries Minister Mahendra Nath Pandey announced that the ministry had received complaints about some electric vehicle manufacturers misappropriating subsidies under the FAME India Phase II scheme.

Most of the grievances the government received centered on violating the PMP's rules and these had been forwarded to the testing organizations for additional verification.

After that, he had said that the models of two OEMs had been taken out of the FAME program and that analyzing their pending claims had been put on hold until they had supplied enough proof of their adherence to PMP timelines.

Among the other OEMs that have been the goal of complaints are Benling India Energy and Technology, Okaya EV, Jitendra New EV Tech, Avon Cycles, Lohia Auto Industries, Victory Electric Vehicles International, Greaves Electric Mobility (previously Ampere Vehicles Private Limited), Revolt Intellicorp, Kinetic Green Energy & Power Solutions, Avon Cycles, Lohia Auto Industries, Thukral Electric Bikes, and so on.

FAQs

a. What percentage of the E2W market are OEMs currently holding?

OEMs currently hold a market share of more than 50% of the E2W market.

b. In 2022, how many electric two-wheelers were sold, and which manufacturers became the first to reach 1 lakh in annual sales?

In 2022, about 6 lakh electric two-wheelers were sold, and Hero Electric, Ola, and Okinawa were the first manufacturers to surpass 1 lakh annual sales.

c. Why is it possible that the anticipated sales of 1 million units for FY23 will fall 20% short?

A 20% shortfall in the anticipated sales of 1 million units for FY23 is possible due to factors like the subsidy blockage of Rs 1,100 crore plus, which has put a strain on the working capital of significant OEMs.

d. What elements played a part in the sales decline over the last two months of the year?

The decrease in sales in the final two months of the year was caused by a number of factors, including the subsidy being blocked, supply chain disruptions, and an increase in the price of raw materials.

e. How many electric two-wheelers are expected to be sold in FY24, and what effect might the current slowdown have on that number?

For the fiscal year 2024, more than 2 million electric two-wheelers are anticipated to be sold. If the current slowdown is not immediately fixed, it might negatively affect this volume.

f. What actions have been taken against the OEMs who have been accused of misappropriating subsidies under the FAME India Phase II program?

Greaves Electric Mobility (in the past Ampere Vehicles Private Limited), Revolt Intellicorp, Kinetic Green Energy & Power Solutions, Avon Cycles, Lohia, Okaya EV, Jitendra New EV Tech, Benling India Energy and Technology Auto Industries, Thukral Electric Bikes, and Victory Electric Vehicles International are just a few OEMs that have come under fire for allegedly stealing subsidies from the FAME India Phase II program. Models from two OEMs have been taken out of the FAME scheme, and processing of any outstanding claims for them has been put on hold until they can show that they followed the PMP timelines with sufficient documentation.