News/ Industry/ June Sees Lowest EV Sales in 2024

June Sees Lowest EV Sales in 2024

EV Sales have seen a steep downfall of 24 per cent in June compared to May. This is not a good signal for the planned transition to electric vehicles. The reasons behind this could be varied, like the government's policy changes and the rise of hybrid cars in recent times. One saving grace is that EV sales saw around 6% growth on a year-on-year basis. 

The Numbers 

According to Vahan data from the Ministry of Road Transport and Highways, EV sales in June 2024 dropped over 12 per cent to 1,08,703 units from 123,705 in May. This was the lowest sales figure of any month in this year. If we consider the complete year of 2024, around 8,42,191 electric vehicles have been sold, which puts their share at 6.69 per cent of total vehicle sales. June ranked as the worst month for EVs two years in a row now. That being said, June 2024 hasn't been as dull as 2023, with 1,08,703 units registered, almost a 6 per cent increase from 102,645 units in June 2023.

Reasons For Decline 

This year, the central government halved the previous subsidy buyers enjoyed when buying EVs in April with the launch of the Rs 500 crore Electric Mobility Promotion Scheme 2024 (EMPS 2024). Under EMPS 2024, the subsidy cap for electric two-wheelers (e2Ws) has been lowered to Rs 10,000 per vehicle from Rs 22,500. For electric three-wheelers (e3Ws), it has been reduced to Rs 50,000 from Rs 111,505. Both categories will now receive incentives of Rs 5,000 per kilowatt-hour (kWh).

This comes on top of the Central government reducing the maximum subsidy for electric two-wheelers (e2Ws) from Rs 60,000 to Rs 22,500, raising the average price of an e2W, which usually costs between ₹80,000 and ₹1,50,000, by over 20 per cent in 2023. This made June a terribly bad performing month when it came to EVs. After the government decided to reduce the subsidy, most original equipment manufacturers (OEMs) increased their vehicle prices in the first week of June. This led to a substantial price difference between green vehicles and petrol-powered ones, affecting the purchasing decisions of potential buyers.

Except for declining demand, EVs are facing strong competition from hybrid vehicles, which have increasingly become customers' preferred option over EVs. 

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TopGear Magazine July 2024