In June 2024, India’s electric vehicle (EV) market experienced a significant decline of over 14 per cent compared to May, due to interplay of government policy adjustments and shifting consumer preferences.
Despite this setback, the figures for June 2024 showed a promising 20 per cent increase from the previous year, which had also faced challenges due to subsidy revisions.
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| Inadequate charging infrastructure in India is one of the reasons for this downturn in EV sales. |
The ministry of road transport and highways’ Vahan data revealed that EV sales in June 2024 amounted to 106,081 units, down from 123,704 units in May.
This downturn marks the lowest monthly sales of EVs so far in the year.
Year-to-date, approximately 839,545 (8.39 lakh) electric vehicles have been sold, which is about 6.69 per cent of the total 1.25 crore (12.5 million or 12,541,684 vehicles) sold across various segments.
Several factors have contributed to the decline in EV sales. A specialist in Connected, Autonomous, Shared, Electric (CASE) and alternative powertrains said that reduced incentives for electric two-wheelers (e2Ws), growing consumer confidence in hybrid vehicles, inadequate charging infrastructure, and the relatively high prices of EVs were the key influencing factors for this.
June consistently emerges as a challenging month for EV sales, a trend observed over the last few years. However, comparison with the June 2023 low indicates a resilient market despite short-term setbacks.
Govt policy shift on e2Ws
Last year, a government decision to slash subsidies for e2Ws resulted in a substantial increase in their average prices, which significantly dampened consumer demand.
This year, further reduction in subsidies was implemented under the Electric Mobility Promotion Scheme 2024 (EMPS 2024).
The scheme now provides subsidies of ~10,000 per vehicle for e2Ws, a decline from the earlier ~22,500 and similarly revised subsidies for e3Ws.
Industry insiders are concerned about the potential repercussions on sales if the central governmental support declines.
Centre’s PLI scheme a good move
The imminent transition to the production-linked incentives (PLI) scheme for automobiles, scheduled to commence in April 2025, is viewed as a critical juncture that could shape the industry’s trajectory, moving forward.
Despite the June 2024 decline, the year-on-year (YoY) growth paints a more optimistic picture for the EV market.
As stakeholders navigate these challenges, the future of electric vehicles in India hinges on striking a balance among incentivising adoption, enhancing infrastructure, and bolstering consumer confidence.
Impact of policy changes
The decrease in EV sales in June 2024 can be attributed to several factors, primarily changes in government policies affecting subsidies and incentives.
Factors influencing decline in EV sales
Experts attribute the decline in EV sales to lower incentives for e2Ws, increased consumer preference for hybrid vehicles, inadequate charging infrastructure, and high EV prices. These factors collectively impacted consumer decisions in the EV market.
Industry concerns and future outlook
Industry insiders expressed concern about potential sales stagnation if government support wanes. The upcoming transition to the PLI scheme in April 2025 will be monitored before any bullish stance is seen.
E-Vroooom’s views
Even as electric vehicle sales in India fell 14 per cent in June amid policy changes, the YoY growth trend indicates resilience in the market, and moving forward, maintaining a balance among — incentives, infrastructure development and consumer confidence (on pricing and range anxiety) — will be crucial for sustaining growth in the EV space.
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