- ByStartupStory | March 27, 2023
Experts predict that electric vehicle (EV) sales will surpass two million units in the upcoming fiscal year, assuming current trends continue. The momentum across various segments is expected to increase during FY24 due to the significant incentive amount yet to be disbursed under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II programme, which is set to conclude at the end of the next fiscal year.
During the current fiscal year, retail sales of electric vehicles (EVs) have already surpassed 1.11 million units, comprising more than 5% of total automobile sales. These figures represent a remarkable growth rate of 147% from the previous fiscal year. As per the government’s Vahan website data, approximately 1.1 million EVs have been registered with regional transport offices in the current fiscal year.
The growth of electric vehicle (EV) sales in the current fiscal year has been primarily driven by electric fleet operators and individual buyers of two- and three-wheelers, thanks to increased availability of charging points, new launches, and lower operating costs. Electric two-wheelers and three-wheelers have been the top sellers this fiscal year, with 690,000 units and 372,000 units sold, respectively.
The Vahan website reported 84,635 e-vehicle registrations so far in March, indicating sustained growth following February’s retail sales of 105,976 units. The current fiscal has seen strong growth for electric two- and three-wheelers, with the e-scooter industry projected to reach 25% penetration in FY24. Experts attribute this growth to increased consumer education that EVs are an upgrade from ICE vehicles, not just for better TCO. E-scooters have led the way with penetration rising from 12.2% in April 2022 to 15.1% in February 2023, they said.
Ather Energy, a major electric two-wheeler maker, has experienced strong growth in retail sales this fiscal year, with 70,392 units sold in the 11-month period. Despite production volume limitations caused by the chip shortage in the first six months of the fiscal year, the company has expanded its retail footprint from 30 to 130 stores. Ather Energy has also set up an additional 851 public fast charging points, bringing the total number to 1,164 across the country, to encourage the faster adoption of electric vehicles.
Suman Mishra, CEO of Mahindra Last Mile Mobility, a top three-wheeler manufacturer, stated that the company has achieved a strong performance, with EV sales increasing by 2.5 times compared to FY22. Mishra added that their service network also increased significantly, and they plan to continue the momentum from FY23 into FY24.
Experts predict that due to their lower total cost of ownership, electric three-wheelers will account for approximately 30% of sales by FY25. Tata Motors, a major player in the EV market, plans to double its sales of electric passenger vehicles to 100,000-110,000 in FY24. The company is expected to exceed sales of 50,000 units in FY23 with the introduction of more EV models including electrified versions of current and next-generation vehicles.
To cater to the rising demand for electric vehicles, companies have been increasing their manufacturing capacity. In November 2023, Ather Energy inaugurated its second plant, which has an annual production capacity of 420,000 units. Meanwhile, Mahindra Last Mile Mobility signed an MoU with the Telangana government for expanding its Zaheerabad plant. According to Gagan Sidhu, director at the Centre for Energy Finance, state policies have played a significant role in driving EV sales. If the current growth trend continues, the industry could see EV sales cross 2 million units in FY24.
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