The electric vehicle (EV) market in India, which is mostly driven by sales of electric two-wheelers, had a slight decline in sales in April when compared to the same month the previous year. The Federation of Automobile Dealers Associations (FADA) made this information public on Thursday.
Sales of electric two-wheelers fell to 65,111 from 66,873 during the same period previous year, representing a 2.63% decrease in the number of units supplied to customers. This decline is ascribed to concerns regarding the government’s declining subsidies and the rising cost of electric two-wheelers.
There has been a fog of uncertainty surrounding the government’s demand subsidies since July, when the Electric Mobility Promotion Scheme 2024 (EMPS) expired. Following the completion of the FAME 2 scheme on March 31, the EMPS was implemented as a four-month temporary measure.
With concerns about whether the EMPS would be extended and whether the newly elected administration will unveil a third phase of the FAME initiative during the full budget presentation for the fiscal year 2025 in July, the future of the subsidy program is still unclear. Notably, the subsidy amount under the new system, which went into effect on April 1, was lowered from the previous Rs. 5,000 per kWh to Rs.
Even with the two-wheeler segment’s decline, the overall EV industry showed remarkable growth in other categories. Electric three-wheeler sales increased by 10.36% to 42,030 units, while sales of electric passenger vehicles significantly increased by 22.79% to 7,415 units. The market for electric commercial vehicles performed exceptionally well as well, seeing a 43.3% increase in sales to 510 units.
The size of the auto retail sector is demonstrated by FADA India, the umbrella organization that represents over 15,000 car dealerships and over 30,000 dealership outlets nationwide, as well as other regional, state, and local car dealer associations. Through its network of dealerships and service centers, FADA estimates that it employs almost 4.5 million people overall.
