EV Sales Drop 14% in June, Highlighting Industry Challenges

In June 2024, electric vehicle (EV) sales in India experienced a significant 14% decline compared to May, with only 106,081 units sold, according to Vahan data from the Ministry of Road Transport and Highways. This marked the lowest sales figure for the year so far. Experts attribute this drop to a combination of changes in government policies and a growing consumer interest in hybrid vehicles.

Despite the monthly decline, June 2024 sales were over 20% higher than in June 2023, when sales had plummeted due to adjustments in government subsidies. The June 2024 figure of 106,081 units represents a 20.52% increase from the 102,645 units registered in June 2023.

To date, approximately 839,545 electric vehicles have been sold in 2024, making up around 6.69% of total vehicle sales. Electric two-wheelers (e2Ws) play a crucial role in this market, accounting for 57% of the total EV sales this year. Consequently, fluctuations in e2W sales significantly impact the overall EV market performance.

Last year, the Indian government reduced the maximum subsidy for electric two-wheelers from around Rs 60,000 to approximately Rs 22,500, causing a more than 20% increase in the average price of e2Ws. This price hike, which occurred in the first week of June 2023, widened the gap between electric and petrol-powered vehicles, affecting potential buyers' decisions.

In 2024, the government further cut the subsidy by half with the introduction of the Rs 500 crore Electric Mobility Promotion Scheme 2024 (EMPS 2024). Under this scheme, the subsidy cap for e2Ws dropped to Rs 10,000 per vehicle, down from Rs 22,500, and for electric three-wheelers (e3Ws), it was reduced to Rs 50,000 from Rs 111,505. Both categories now receive incentives of Rs 5,000 per kilowatt-hour (kWh).

June has been the worst-performing month for EV sales for two consecutive years. However, the market's resilience is evident in the year-over-year growth, suggesting that despite current challenges, the interest and demand for electric vehicles continue to grow.