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India’s BEV Motorcycle Sales Increased Nearly 40% in 2023

Sales of BEV motorcycles in India in 2023 (excluding low-speed BEV motorcycles with a maximum speed of 25 km/h or less) increased by 36.1% from the previous year to 859,085 units. The share of BEVs in the motorcycle market went up by 1.0 point to 4.9%. Although sales rose nearly 40%, from June 2023 FAME II BEV purchase subsidy was reduced from 15,000 INR to 10,000 INR per kWh of battery capacity, and the upper limit was also lowered from 40% of the ex-factory price to 15%. As a result, sales from June to December increased only 13.1% compared to the same period last year.

Ola Electric Mobility sold 266,869 units in 2023, 2.4 times more than the previous year, increasing its market share by 13.7 points to 31.1%, making it the top seller for the second consecutive year. In addition to its flagship product the S1 Pro (ex-showroom price 139,999 INR), Ola Electric Mobility launched the low-cost model S1 Air (119,999 INR), which uses a hub motor and the new second-generation BEV platform in August 2023. In December, the even cheaper model S1X+ (109,999 INR) was introduced at 89,999 INR with a 20,000 INR discount. In addition, Ola Electric Mobility offered various promotional activities such as 1,000 to 2,000 INR cashback system for purchases made through referrals from friends and acquaintances, 5,000 INR discount for three days, five-year free battery guarantee, zero down payment, zero fees and 6.99% interest rate among others. As a result, in December, monthly sales reached a record high of 30,000 units, and its market share exceeded 40% for the first time. However, the company’s financial results for the fiscal year ending March 2023, which were released in December 2023, showed a loss of 13.7 billion INR before tax.

Ola Electric Mobility expanded the annual production capacity of its BEV motorcycle factory, “Futurefactory,” from 450,000 units to 1 million units in October 2023, and plans to develop and mass-produce BEV motorcycle products from 2024, and expand its battery factory, “Gigafactory,” in 2025. Since a huge amount of capital will be required to realize these goals, raising funds through an IPO has become an urgent issue. Ola Electric Mobility is aiming to significantly reduce the cost of BEV motorcycles by producing battery cells in-house, and with its overwhelming competitiveness, build a production system of 10 million units in the future. However, electric two-wheeler sales of major Indian manufacturers such as TVS Motor, Baja Auto, and Hero MotoCorp are also rapidly expanding, posing a threat to Ola Electric Mobility.

TVS Motor sold 166,355 units in 2023, 3.5 times more than the previous year, quickly rising from 6th place in the previous year to 2nd. Bajaj Auto sold 76,614 units, an increase of 3.0 times, moving from 7th place in the previous year to 4th. Meanwhile, Hero MotoCorp, which entered the electric motorcycle market in November 2022, sold only 11,125 units in 2023. However, Ather Energy, which is 36.7% owned by Hero MotoCorp, doubled sales to 104,468 units, moving from 5th place in the previous year to 3rd. Hero MotoCorp raised its stake in Ather Energy by 3% to 39.7% in January 2024, aiming to strengthen its electric vehicle business through the partnership.

Okinawa Autotech and Hero Electric, which competed for top sales in 2022, were found to have cheated on domestically produced electric parts, which is a condition for purchasing subsidies, both seeing their sales drop by some 70% to around 30,000 units. Ampere, a subsidiary of Greaves Electric Mobility, which ranked 4th in sales in 2022, had its subsidies suspended due to fraud in June 2023. As a result, its sales dropped from over 80,000 units the previous year to 66,939 units.

India’s FAME II subsidy is scheduled to end in March 2024, and its extension thereafter was undecided as of January 2024. If subsidies are reduced or ended, there will be more pressure to lower prices, and Honda’s entry into the electric motorcycle market is expected to further intensify competition.

Graph: India: Sales Volume of BEV Motorcycles and Their Market Share (2018-2023)Graph: India: Monthly Sales Volume of BEV Motorcycles (Jan. 2021-Dec. 2023)
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