New Delhi: The slow but steady advance of the ICE two wheeler manufacturers may have begun to tip the scales in their favour in the electric two wheeler (e2w) pecking order. Data from the government’s Vahan portal shows that the three marquee ICE OEMs – TVS Motor Co, Bajaj Auto and Hero Motocorp – have together sold over 38,000 units in August versus the combined retails of electric-first companies Ather Energy and Ola Electric at just below the 38,000 unit mark. Of course, the other erstwhile stalwarts such as Hero Electric, Hop Electric, Okinawa, Okaya and Tork Motors continue to be a shadow of their former selves, with just some hundreds – and in one case not even 10 – units sold in the month.So in August, the ICE OEMs grabbed over 43% of the total e2w market, up from the nearly 39% share in July. This gain of almost four percentage points in market share by the ICE OEMs in August happened as Ather and Ola ceded ground. The two electric-first OEMs fell from nearly 47.9% share in July to nearly 43% in August. Ola Electric, the single largest e2w retailer, saw a steep decline in market share to just about 31% in August from nearly 39% in July. Bajaj Auto was the biggest gainer, at over 18% share of the market in August from less than 16% in the previous month.
Overall, the e2w market declined substantially month on month, with total retails in August at just over 88,000 units against over 1.07 lakh in July. Sales have been impacted as the quantum of purchase subsidy remains at the lower levels of INR 5000 per vehicle and people in the know indicate that in any new purchase subsidy scheme, electric two wheelers are unlikely to get a higher quantum of subsidy gong forward.
Subsidy calendar:
Since the beginning of the fiscal year, the subsidy regime has fallen under the Electric Mobility Promotion Scheme (EMPS), a bridge scheme till a new edition of Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme is unveiled by the government. Purchase subsidies for electric two wheelers have traditionally been housed under the FAME scheme’s various editions before EMPS was brought in.
But the second edition, FAME II, lapsed on March 31; it had anyway lowered the quantum of subsidy on each e2w substantially. Under FAME II, the subsidy amount available for e2w had been cut gradually, from about 45% of the vehicle cost or INR 30,000 per kWh initially, to INR 15,000 per kWh and and now to INR 5,000.
Now, the EMPS is scheduled to end in September but there is some uncertainty over the contours of FAME III so the EMPS could get another extension. An industry veteran close to the developments said that till FAME III provisions are finalised by the government, EMPS “could be extended for a month or two beyond September”.
The decline in the overall e2w sales in August is also being seen in the context of the subsidy regime flip flops. The market expects sales to again rise in September as buyers react to the uncertainty about subsidy regime beyond September.
ICE rule beginning?
The ICE OEMs have already lined up sub-INR one lakh products to take on the Ather and Ola grip over the electric two wheeler space. Bajaj now has the Chetak 2901, its first sub one lakh rupees product. Besides, it has continued to emphasise expansion of the distribution network for e2ws. The sub one lakh rupees segment accounts for nearly 50% of the e2w market.
The new Chetak 2901 will help Bajaj Auto address this particular segment while also allowing the company to widen its distribution reach. “We were at 250 stores in June but by the end of July we had reached nearly 500 stores and we will open 1000 stores by September. Our Q1 FY 25 (April-June) market share was 12% but it should be noted that we were at 20% share in the above one lakh rupees segment and almost nil in the sub one lakh rupees segment. Hence, play in the sub one lakh rupees segment and in new geographies should lift Chetak business significantly, Executive Director Rakesh Sharma had said recently.
Chetak 2901 is priced between INR 96,000-1,00,000. Ola, TVS and some other OEMs have also launched products in the sub one lakh rupees segment over the last few months, eyeing budget conscious consumers who do not mind lesser features as long as the product becomes more affordable. Ather has launched the Rizta – a family scooter which is priced just above the INR one lakh mark. Ola meanwhile has dropped prices on the SX1 series so that the lineup starts well below the one lakh rupees psychological barrier.
