September was a flourishing month for the electric two-wheeler segment. Maharashtra, Karnataka, Tamil Nadu, Rajasthan, Gujarat and Delhi formed 69% sales last month. But what has driven this massive sales growth? And will this growth sustain? Let’s find out.
What’s Happening?
September proved glorious for the electric two-wheeler segment as the sales massively grew in a month. Almost 15% of the two-wheelers sold in the country last month were electric.
Apart from this, various new models of electric two-wheelers were launched, production capacity was increased, and the festive demand gave the required boost.
But, What Has Led To Such a Massive Growth in the Electric Two Wheeler Segment?
- FAME II Subsidy
The FAME II is a subsidy that the Government of India offers as an initiative to encourage faster adoption of electric vehicles in India. Under this initiative, if an EV vehicle qualifies under the said category, the scheme would offer a subsidy, and the EV price will be cut to a certain extent.
For example, in 2021, Ather Energy cut the price of its Ather 450X electric scooter by Rs 14,500 under this amendment.
At the beginning of 2022, the FAME II scheme subsidy for FY23 was projected. The projection was more than three-and-a-half times the allocation for FY22 and about nine times higher than FY21. This increasing subsidy is encouraging people and delivery chains to adopt electric vehicles.
- Running Cost
People have realised how cost-effective an electric two-wheeler can be. The EV two-wheeler runs at just Rs 0.35 per km while a two-wheeler which runs on petrol takes Rs 2.20 per km. If a petrol-based two-wheeler costs Rs 110/50 km, an EV two-wheeler will cost a mere Rs 17.5/50 km. That is quite a big difference. Hence, individuals and food delivery chains have switched to EVs as it is cost-effective.
The Dark Side
Along with benefits, we hear many accidents caused while using EV vehicles. Sometimes it catches fire or the battery blasts, which could cause harm to humans. Hence, individuals also refrain from buying EV two-wheelers.
While addressing the issue, Mr Manish Raj Singhania, president of the Federation of Automotive Dealers Association of India, said, “The entry of mass-market industry leaders into the electric two-wheeler space would help restore the confidence among the public, especially regarding safety”.
Reputed two-wheeler producers are coming up with electric two-wheelers. The Honda Activa Electric scooter is said to launch in FY23. And many other companies are coming up with new models. So, it is safe to say that the EV two-wheeler market is poised for growth.
What’s Next?
Recently, the Former Niti Aayog chief executive Amitabh Kant said, “India’s two-wheeler market should wholly become EV in the next four years”.
For this to happen, we must also have adequate EV charging stations or battery swapping stations so that no one has to worry before going on a long drive!
Note: The stocks mentioned in the article are for informational purposes.
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