Electric Vehicle Sales Rise 19% In 2024-25, Driven By Government Initiatives

Updated: Wednesday, October 2, 2024, 12:44 [IST]

Electric vehicle (EV) sales in the first half of the fiscal year 2024-25 have seen a significant jump of 19%, reaching 836,621 units up from 702,013 units in the previous year's corresponding period. This growth underlines the increasing popularity and acceptance of electric vehicles in the market. Despite this upward trajectory, the month-on-month growth in August was relatively modest at 1.22%, with sales figures slightly rising from 146,745 units.

In September 2024, there was a notable 24.65% year-on-year increase in EV sales, with 148,539 units sold compared to 119,163 units in September of the previous year. This growth occurred despite September traditionally being a slow month for high-value purchases due to the Shradh/Pitru Paksha period, which is considered inauspicious by many. The sales boost during this period is particularly remarkable, attributed to attractive discounts and offers from manufacturers, tempting consumers to make purchases they would usually postpone.

Government Initiatives and Industry Predictions

Recently, the Union Cabinet introduced two major schemes aimed at promoting EV usage across various vehicle categories, including buses, ambulances, and trucks. These initiatives, with a combined outlay of Rs 14,335 crore, include the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) and the PM-eBus Sewa-Payment Security Mechanism.

The former, with a budget of Rs 10,900 crore over two years, began on October 1, while the latter has been allocated Rs 3,435 crore. These schemes are anticipated to give a significant push to EV sales in the upcoming months.

The industry witnessed a dip in sales following the conclusion of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) subsidy on March 31 and the introduction of the Electric Mobility Promotion Scheme 2024.

The latter halved the subsidy previously available, leading to the year's most pronounced sales decline. However, the sector is optimistic about a resurgence in sales during the festive season beginning October 3, with industry executives forecasting a 10-15% increase in sales during the month.

Market Dynamics and Consumer Behavior

Preetesh Singh, a specialist in CASE and alternative powertrains at NRI Consulting & Solutions, highlighted the unusual nature of the sales increase during the Pitru Paksha period. He attributed this rare occurrence to the compelling discounts and offers that enticed consumers to make purchases ahead of the festive season. Additionally, Singh remarked on the modesty of the sales rise, noting the low base in August, which saw a nearly 13% decrease from July's sales figures.

The EV market's competitive landscape saw significant contributions from the top five players in August, with Ola Electric leading the charge. Sales figures for this month surpassed the 1.23 million mark for the first eight months of 2024, showcasing the sector's resilience and potential for growth. Ayush Lohia, CEO of Zuperia Auto (formerly Lohia Auto), expressed optimism about the impact of new product launches and government incentives on sector recovery during the festive season.

Despite the challenges faced following subsidy reductions, the EV industry remains poised for further expansion. The recent government schemes, coupled with heightened consumer interest and forthcoming festival season, are likely to bolster EV sales, reinforcing the sector's upward trajectory. The industry's adaptability and the government's supportive stance are key factors in driving the transition towards electric mobility in the coming months.