EV Sales Momentum: Two-wheeler and Three-wheeler Lead the Way India's electric vehicle industry touched the milestone of selling one million units in the financial year 2023, with the two-wheeler segment leading the way at 62 per cent, followed by e-three-wheelers at 34 per cent
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
According to the industry body Society of Manufacturers of Electric Vehicles (SMEV), India's electric vehicle (EV) industry touched the milestone of selling one million units in the financial year 2023 (FY23), with the two-wheeler segment leading the way at 62 per cent, followed by e-three-wheelers at 34 per cent .
The industry registered sales of 1,152,021 electric vehicles, which include e-buses, e-cars, e-three-wheelers and e-two-wheelers in FY 2023.
In the electric two-wheeler segment, the industry sold 7,26,976 high-speed E2W (speed>25km/hr) in FY 2023. However, the E2W adoption fell month on month over the targets ending with an annual shortfall of more than 25 per cent over the minimum target set by Niti Aayog. In the e-three-wheelers segment, the industry sold 401, 841 units, whereas 47,217 units of four-wheelers were sold and electric buses stood at 1,904 units.
Industry experts and stakeholders are also concerned that the momentum in E2W adoption fell after the Indian festive season. Ironically, the drop was not caused by a fall in consumer demand but by the sudden withholding of more than the INR 1,200 crore subsidy already passed on by the majority of OEMs to the customers on the pretext of delay in the localization. Today, 16 companies that represent more than 95 per cent of the industry are waiting for some resolution of the FAME PMP to enable them to plan their businesses in the year FY24, SMEV said in a statement.
"Over the years, the E2W industry has been catching pace and working relentlessly towards achieving the country's mission of largely converting to electric. While all the earlier schemes since 2015 had a negligible effect on EV adoption, the revised FAME2 had a dramatic effect on E2W adoption as it decreased their prices by around 35 per cent. This started attracting the component supply chain that had earlier shunned anything to do with E2WS because of extremely low volumes and it is only in late 2021, suppliers started queuing up to OEMS to show their eagerness to develop EV components. It took most of these suppliers 12 to 18 months, the usual time that it takes to localize and now most of them have started setting up sufficient capacities," said Sohinder Gill, DG, SMEV in the statement.
The government's decision on the continuation of FAME is a critical piece that will decide the fate of the entire industry and the market is eagerly waiting for clarity. "It will have a negative effect and could completely eliminate a sizable portion of the market. In order to encourage the development of the EV ecosystem and make it self-sustaining, it is crucial to have an extension of the FAME scheme for at least 3–4 years," the statement added.
