Sales of electric vehicles increased by 137 percent, but market share is very small: FADA
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Electric Vehicle (EV) Automobiles are bringing changes in the industry and their popularity is increasing across the world. Its impact in India is widespread, as recent data from the Federation of Automobile Dealers Associations (FADA) shows. According to his report, in India Electric Passenger Vehicle (EPV) Sales increased by nearly 137 percent in January compared to last year. A total of 8,164 units of e-PV were sold in January 2024, while 3,447 units were sold in January 2023, these numbers speak for themselves.
The share of EVs is very small
The momentum continued on a month-on-month basis, with the segment registering a growth of 13.07 percent compared to December 2023, when 7,220 units were sold. Despite these impressive figures, it is important to remember that the e-PV segment still represents a small portion of the overall passenger vehicle (PV) market. In January 2023, only 1 percent of total PV sales were e-PV, rising to 2.1 percent in January 2024. However, December 2023 saw a 2.5% higher contribution to overall PV sales, reflecting a slightly negative EV adoption trend.
EV sales decline in China
A similar trend was seen in China, where new energy vehicle (NEV) sales increased by 78.8 percent year-on-year in January 2024 compared to January 2023. However, sales declined by 38.8 percent compared to December 2023, raising concerns among automakers.
Slowdown in EV sales predicted in 2024
Despite these positive developments, there are concerns about the future growth of the EV market. A report by Canalys predicts a slowdown in EV sales in 2024, with global growth expected to decline to 27.1 percent. One of the main factors contributing to this slowdown is the reduction in state subsidies, making EVs less financially attractive to potential buyers.
Electric passenger car market remains uncertain
While the electric passenger car market remains uncertain, the electric two-wheeler (E2W) market in India is experiencing steady growth. In January 2024, the e2W category sold 81,608 units, a growth of 26.14 percent compared to the same period last year, when 64,694 units were sold. The growth trajectory was strong on a monthly basis too, with an 8 percent growth compared to December 2023, when 75,522 units were sold.
Increasing demand for electric two-wheeler
In terms of market share, e2W’s share in total two-wheeler sales was 5.1 percent in January 2023, which declined to 5.2 percent in December 2023. This trend continues to increase, reaching 5.6 percent in January 2024, indicating growing demand for electric two-wheelers. wheeled vehicles in the Indian market
Subsidy on two-wheelers reduced from 40 percent to just 15 percent
However, the Centre’s recent decision to reduce the subsidy on electric two-wheelers from 40 per cent to just 15 per cent from next month could pose a significant challenge to the e2W market. The Society of Manufacturers of Electric Vehicles (SMEV) expressed concern that this decision could further reduce EV adoption in the country.
Wide price difference between ICE models and EV models
SMEV Director General Sohinder Gill highlighted the potential impact of the reduction in hiring, noting that it could lead to a major decline in EV adoption and have a lasting impact on the industry. He stressed that the e2W segment is particularly price-sensitive, and the wide price difference between internal combustion engine (ICE) models and EV models could have a negative impact on sales.
Despite challenges, electric two-wheeler market in India remains promising
Despite these challenges, the electric two-wheeler market in India remains promising. As the industry adapts to the changing scenario, stakeholders will need to find innovative solutions to ensure the continued growth and adoption of electric vehicles in the country.
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