The electric vehicle (EV) sector in India has seen an upward trend for several months. However, in May 2024, sales of electric vehicles in India fell by 22.3% from the same month the previous year.
According to data from the Vahan portal, the number of EV registrations in India last month was 123,107. It is a decrease from the 158,459 units registered in the same month the previous year. Remarkably, the top sales for the previous calendar year occurred in May 2023.
As per the data, in May 2024, two-wheelers made up around 51.7% of the 123,107 electric vehicle units sold. On the other hand, three-wheelers contributed approximately 42.5%. The sales of passenger vehicles accounted for about 5.3% of the total, whilst electric buses made up only 0.2%. Agricultural vehicles, freight transporters, and others comprised less than 0.4% of the remaining amount.
What led to the decline in EV sales?
A few months ago, industry analysts projected that the end of the FAME 2 scheme would result in a decline in the registration of electric vehicles in India. Guess what? They were not wrong. Customers feel anxious about the increased cost they would have to pay for buying electric cars now that the subsidy aid.
Moreover, the general elections in India had an effect on the sales of electric vehicles. During elections, many consumers — especially those in the fleet and commercial sector — tend to delay purchasing.
Also, before making any investments, the automakers had to wait for the formation of the new government. In addition to this, the increasing trend towards hybrid cars is having an effect on the sales of electric vehicles.
Heat waves are another aspect that may have affected the sales of electric vehicles. Intense heat waves have been affecting parts of the nation, especially the Northern region, for the past several weeks. This may have reduced customer foot traffic in car dealerships and hurt sales of electric vehicles. It’s interesting to note that this issue reduced the sales of traditional internal combustion engine-powered vehicles as well.
Discussing the decline in sales of electric vehicles, Hyder Khan, CEO of Godawari Electric Motors, commented:
The ongoing general elections have led customers to defer their purchases. Another significant factor is the record-breaking summer or heat waves, which have affected consumer behaviour and reduced overall market activity.
He also added that recent policy changes—specifically, the end of the FAME 2 program and the introduction of the new EMPS scheme—may be the primary cause of the sales decline in May 2024.
