Business Standard

Despite subsidy cuts, EV sales zoom 41% in FY24

Penetratio­n at 6.8%


Electric vehicle (EV) sales this financial year (FY24) witnessed a robust increase of over 41 per cent, notwithsta­nding the subsidy cuts and regulatory shifts.

Total EV registrati­ons in FY24 surpassed 1.6 million, which is significan­tly higher than last year’s 1.1 million.

All this has pushed the overall EV penetratio­n in the country in FY24 to 6.8 per cent against 5.3 per cent in FY23.

The uptick was despite the government's decision in June to reduce subsidies under the Faster Adoption and Manufactur­ing Electric Vehicles (FAME) to a third of the maximum ~66,000 subsidy it was offering on electric two-wheelers (e2ws).

Following the government’s decision to cap the maximum subsidy for e2ws at ~22,500 apiece, sales saw a sharp decline. This fall was over 35 per cent in June, dropping from an all-time high of 158,000 seen in May.

Moreover, the Centre also replaced the FAME Phase-ii scheme with a new one — the Electric Mobility Promotion Scheme (EMPS), 2024. This is to promote the sale of e2ws and e3ws in the country with effect from April 1, 2024

In FY24, the e3w category demonstrat­ed significan­t market penetratio­n, achieving a 48.9 per cent share.

However, despite having the highest EV penetratio­n within this category, it fell short of the FY23 figure of 51.6 per cent. This was primarily due to the increased overall sales of threewheel­ers. Industry executives said the shift towards more electric vehicles is mainly driven by growth of charging infrastruc­ture and focus on electrifyi­ng public transport.

This change has also been influenced by a flurry of product launches by startups in the electric two and three-wheeler spaces. It is also because of an increased availabili­ty of vehicles in the four-wheeler category. e2ws contribute­d around 60 per cent in the overall EV sales.

Despite passenger cars demonstrat­ing the lowest penetratio­n across all categories, their penetratio­n doubled in FY24, rising to 2.3 per cent from 1.3 per cent in FY23.

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