Copyright FOURIN, Inc. 2023
India’s Sales Results of Electric Motorcycles in the First Half of 2023
In India, subsidies for the purchase of electric motorcycles were reduced on June 1, 2023 As a result, sa les in June plummeted by 56.5% from the previous month to 45,806 units. The country introduced the Faster Adoption and Manufacturing of Electric Vehicles (FAME) Scheme in April 2015 to accelerate the spread and production of electric vehicles. In the second phase, FAME II (April 1, 2019 to March 31, 2024), the purchase subsidy for electric motorcycles was increased from 10,000 INR to 15,000 INR per kWh starting from June 2021. The upper limit has also been raised from 20% to 40% of the factory price. Due in part to soaring gasoline prices, sales of electric motorcycles rapidly increase d to 15 3 523 units in 2021 and to 624, 192 units in 2022 and continue d to expand in the first half of 2023 by nearly 70 % compared to the same period last However, Okinawa Autotech and Hero Electric, which were competing for the top sales position, were found to have committed fraud under the domestic production regulations for electric parts, which is a condition for subsidy payments, resulting in the suspension of their subsidy payment s Other major electric motorcycle manufacturers have also been subject to fraud allegations.
The government has already informed electric motorcycle manufacturers that it will not introduce a new purchase subsidy system after FAME II ends at the end of March 2024 . So, t he current subsidy reduction can be seen as a step by step measure toward ending the scheme which means that e lectric motorcycle manufacturers must continue to expand sales and improve profitability to stay in business.
Ola Electric, the top seller of electric motorcycles, is running promotional campaigns such as a 2,000 INR trade in bonus for gasoline engine motorcycles, 3,000 INR cashback on purchase, 6.99% low interest loan, and zero down payment. Partly because of th ese activities , while other companies sales in June were down 60% 90% compared to the previous month, Ola Electric s sales dropped only 38.6%, and its sales share in the same month rapidly increased to a record high of 38.4%. T he company ’s top priority now is to expand its market share, but it s goal of cumulative production of 10 million units by November 2024 does not seem achievable. Ola Electric aims to halve battery prices and achieve rapid growth with overwhelming price competitiveness by producing battery cells in house by 2024 and switching from ternary cells to iron phosphate batteries However, l aunching mass production of cells is not easy even for major battery manufacturers, so it remains to be seen how this will unfold.