Sales of electric two-wheelers more than doubled in May

Sales of electric two-wheelers more than doubled in May from a year ago--topping 100,000 units for the first time—pushed up by customers wanting to avoid the anticipated increase in vehicle prices.

Prices of electric two-wheelers registered on or after June 1 are set to increase with the government reducing the subsidy it was providing under its FAME II (Faster Adoption and Manufacturing of Electric Vehicles) scheme.

Data available on VAHAN portal of the ministry of road, transport & highways (MoRTH) shows as many as 104,771 high-speed electric scooters were registered last month, an increase of 148% over May 2022. Overall, two-wheeler sales (petrol and electric) surged by 11% in the same period.

With this, penetration of electric two-wheelers measured in terms of registration of scooters, motorcycles and mopeds increased to 7% last month, from 5.4% in April 2023.

“With new reduced subsidy norms to kick in from June 1, 2023, most EV OEMs (are) to take price hikes in the range of Rs 15,000-30,000 (approx. 10-15%), leading to pre-buying in May 2023,” said Elara Capital in a note.

TVS Motor Company, Ather Energy, Ola Electric and Ampere are among the companies that have revised prices of their vehicles. Hero Electric, though, has said it is not increasing prices at the moment.

"We have recorded the best monthly sales in May '23, with retail sales of 15,256 units, registering 357% year-on-year growth,” said Ravneet Singh Phokela, chief business officer at Ather Energy. “The market gained strong momentum this month, which can be attributed to the growing underlying demand, fuelled further by the news of the impending revision of the FAME subsidy. This led to some consumers bringing forward their purchases in order to avail the higher subsidy amount.”


Ola Electric, too, reported a growth of 300% to 35,000 units in May, its best-ever monthly sales. Bhavish Aggarwal, its founder, said, “Month after month, our sales have experienced exponential growth…This remarkable feat not only reflects the unwavering customer confidence in our brand but also signifies the surging desire for technologically advanced EVs in the country.”

Aggarwal said the company has increased product prices marginally starting June, despite significant reduction in government subsidies, to ensure that Ola S1 is the best EV proposition in India.

In a notification last month, the ministry of heavy industries (MHI) said that effective from June 1, it would reduce the subsidy on e-two-wheelers to Rs 10,000 per kWh from Rs 15,000 kWh, and maximum subsidy will be capped at 15% of the ex-factory pricing against 40% offered earlier.

The Centre has raised the funding support for electric buses and two-wheelers but slashed the subsidy for three-wheelers, as part of a rejig of the Rs 10,000-crore electric vehicle (EV) incentive scheme, ET had reported on May 21. But even as budgetary allocation for electric two-wheelers has been enhanced to around Rs 3,500 crore, subsidy per unit has been reduced to facilitate support for a larger number of vehicles.

Although this will mean an increase in the price of e-bikes, government officials said manufacturers will get support for higher production. The changes effected seek to fast-track adoption of electric vehicles in categories that are perceived to have the highest impact socially as well as environmentally in curbing vehicular pollution.

In May, Ola Electric retained its top spot with registrations at 28,438 units. Ola Electric commanded a share of 27.1% in the local electric two-wheeler market, followed by TVS Motors at 19.3%, Ather Energy at 14.6%, Bajaj Auto at 9.5% and Ampere at 9.2%, as per data available on VAHAN portal.

Top 10 EV 2W players by volume in May 2023