The domestic electric vehicle sales in the country stood at 11,52,021 units in FY22-23, according to the data compiled by the Society of Manufacturers of Electric Vehicles (SMEV). Amongst the total EV sales, electric two-wheelers sales stood the highest at 62%. The electric two-wheeler manufacturers sold 7,26,976 units in FY23. However, the electric two-wheeler adoption fell short by more than 25% on a month-on-month basis over the minimum target set by Niti Aayog and various research organisations.
The industry body has attributed the decline in electric two-wheeler adoption to the sudden withholding of over ₹1,200 crore subsidy already passed on by the majority of OEMs (original equipment manufacturers) to the customers on the pretext of delay in the localisation. Moreover, an additional ₹400 crore has been stuck for OEMs in the premium end due to the allegation of under-invoicing to bypass the FAME norms leading to the crippling of their business operations due to an extreme shortage of working capital. At present, 16 companies that represent more than 95% of the industry are waiting for some resolution to the chaos and the fiasco of the FAME PMP (Phased Manufacturing Program) are cleared to enable them to plan their businesses in the year FY24, according to SMEV.
In December last year, the government said that it is probing 12 auto manufacturers for misappropriation of funds under the FAME-II subsidy. The FAME-II subsidy was launched on April 1, 2023, for a period of five years, at a capital outlay of ₹10,000 crore. The scheme aims to support 10 lakh electric two-wheelers, five lakh electric three-wheelers, 55,000 electric four-wheelers and 7,000 buses.
"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 the EV adoption, the revised FAME-II in late 2022 had a dramatic effect on E2W adoption as it decreased their prices by around 35%," says Sohinder Gill, DG, SMEV and CEO Hero Electric.
"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 of developing EV components. It took most of these suppliers 12 to 18 months, the usual time that it takes to localise and now most of them have started setting up sufficient capacities," he adds.
Meanwhile, the electric three-wheeler sales stood at 4,01,841 units, thus accounting for 34% of the total EV sales. Electric four-wheeler sales accounted for 4% of the total sales at 47,217 units, whereas the sales of electric buses stood at 1,904 units.
Last month, Amitabh Kant, G20 Sherpa of India, said that the country should target making the sales of two-wheelers and three-wheelers to be 100% electric in the next five years.
"India should target making two and three-wheelers sales 100% electric in the next five years. This will not only help reduce air pollution but also ensure that we become a global manufacturing champion for electric two-wheelers and three-wheelers. Public mobility is the backbone of a civilised society. Focus should also be on e-buses," Kant said.