Mumbai: The next fiscal is expected to see electric vehicle (EV) sales crossing the 2 million mark if current trends continue, experts said. A significant incentive amount is yet to be disbursed under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II programme set to end at the end of the next fiscal and will add to the momentum across segments in FY24, they said.
Retail sales of EVs have already crossed 1.11 million units this fiscal year, accounting for more than 5% of total automobile sales and posting a growth surge of 147% from FY22. According to data on the government’s Vahan website, about 1.1 million EVs have been registered with regional transport offices this fiscal.
EV fleet operators and individuals buying two- and three-wheelers have been the main drivers of this growth, with new launches and increased availability of charging points, along with low running costs, attracting buyers. Electric two- and three-wheelers accounted for maximum sales this fiscal at 690,000 units and 372,000 units, respectively.
E-vehicle registrations so far this month stood at 84,635 units, as per the Vahan site. In February, retail sales touched 105,976 units, indicating sustained growth.
Consumer Education Pays Off
The current fiscal has seen strong growth for electric two- and three-wheelers, with the e-scooter industry expected to reach 25% penetration in FY24. Consumer education to the effect that EVs are an upgrade from internal combustion engines (ICE) and not just vehicles for better total cost of ownership (TCO) have paid off this year, experts said. Expectedly, e-scooters led the way with penetration growing from 12.2% in April 2022 to 15.1% in February 2023, experts said.
“Ather has also witnessed sharp growth this year, with retail sales of 70,392 in the 11-month period. This is despite a very soft first six months in this fiscal on account of chip shortage that severely limited our production volumes,” said Ravneet Phokela, chief business officer, Ather Energy, a leading electric two-wheeler maker. “We also expanded our retail footprint by 4x this year to 130 stores from 30 stores last year. For faster adoption of EVs, Ather set up an additional 851 public fast charging points in the year and now has 1,164 grids in the country.”
Mahindra Last Mile Mobility, a leading three-wheeler maker, has also delivered a strong performance. “Our EV sales have increased 2.5 times when compared with FY22. Our service network scaled up significantly,” said Suman Mishra, CEO of Mahindra Last Mile Mobility. “We expect to continue our momentum from FY23 into FY24.”
Industry experts suggest that electric three-wheeler penetration will be about 30% by FY25, because of lower total cost of ownership.
Tata Motors, a major retailer of electric vehicles, is aiming to double electric passenger vehicle sales to 100,000-110,000 in FY24. It’s likely to end FY23 with sales in excess of 50,000 units following the launch of more EV offerings – electrified versions of existing and second generation models.
Companies have been expanding capacity to cater to the growing demand. Ather inaugurated its second manufacturing plant with an annual production capacity of 420,000 units in November 2023. Mahindra recently signed an MoU with the Telangana government for expansion of its Zaheerabad plant.
State policies have helped boost EV sales, said Gagan Sidhu, director, Council on Energy, Environment and Water (CEEW), Centre for Energy Finance (CEF). If volumes continue their rising trend, “we will be looking at EVs easily crossing the 2 million mark in FY24,” said Sidhu.
