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Sector experts suggest that the sharp decline could be due to a combination of factors such as changes in government policies and customers shifting interest towards hybrids. (Photo: Shutterstock)
The electric vehicle (EV) market in the country experienced a downturn in June 2024, marking the lowest sales month of the calendar year. According to Vahan data from the Ministry of Road Transport and Highways, EV sales in June fell by more than 14 per cent to 106,081 units, compared to 123,704 units sold in May. This decline highlights a significant challenge for the industry, which had seen more robust sales figures earlier in the year.
So far this year, around 839,545 electric vehicles have been sold, accounting for approximately 6.69 per cent of total vehicle sales. Notably, June has been the worst-performing month for EVs both this year and last year. However, June 2024 saw a slight improvement, with 123,704 units registered, marking a 20.52 per cent increase compared to the 102,645 units registered in June 2023.
Sector experts suggest that the sharp decline could be due to a combination of factors such as changes in government policies and customers shifting interest towards hybrids.
Last year, EV sales declined due to the Centre’s decision to reduce the maximum subsidy for electric two-wheelers (e2Ws) from approximately Rs 60,000 to around Rs 22,500. This move led to an increase of more than 20 per cent in the average price of an e2W, which typically ranges from Rs 80,000 to Rs 1,50,000.
Following the government’s decision to cut the subsidy, most original equipment manufacturers (OEMs) raised their vehicle prices in the first week of June. This created a significant price gap between green vehicles and petrol-powered ones, thus impacting the purchasing decisions of potential buyers.
Electric two-wheelers (e2Ws) account for 57 per cent of the 839,545 electric vehicles sold overall in 2024. Changes in e2W sales significantly impact the overall sales of the EV category.
This year, the government further reduced the subsidy by half in April with the introduction of the Rs 500 crore Electric Mobility Promotion Scheme 2024 (EMPS 2024). Under EMPS 2024, the subsidy cap for electric two-wheelers (e2Ws) is now Rs 10,000 per vehicle, down from Rs 22,500, while for electric three-wheelers (e3Ws), it has been reduced to Rs 50,000 from Rs 1,11,505. Both categories will receive incentives of Rs 5,000 per kilowatt-hour (kWh).
Sector experts suggest that the sharp decline could be due to a combination of factors such as changes in government policies and customers shifting interest towards hybrids.
First Published: Jul 01 2024 | 10:35 AM IS