Despite the aggressive push from the government, sales of Electric Vehicles (EVs) saw a 20% dip at 236,802 units in the last fiscal year compared to 295,683 units in FY20, the Society of Manufacturers of Electric Vehicle (SMEV) said. This is for the first time in five years the sales of electric vehicles have seen a decline.
About 60.74% of sales came from the electric two-wheelers, which accounted for 143,837 units sales, out of which 40,836 high-speed and 103,000 low-speed vehicles. The sales of electric two-wheelers declined by 6% in FY21, having registered sales of 152,000 units in the FY20.
The electric three-wheeler sales dropped by 37.17% at 88,378 units in FY21 against 140,683 units in FY20. This is primarily due to the curb on public transport on account of COVID-19.
The electric four-wheeler is the only segment that registered sales growth of 52.93% at 4,588 units compared to 3,000 units in FY20.
Sohinder Gill, Director-General, Society of Manufacturers of Electric Vehicle (SMEV), said, “We were anticipating a good growth before the start of FY 21, but sales remained stagnant due to various reasons. The sales in the electric three-wheeler and two-wheeler segment stood low as compared to last year. A good thing has happened that people started moving towards advanced batteries, i.e. lithium. The city speed and high-speed category in the two-wheeler segment have witnessed growth. However, a lot more needs to be done to achieve the target under the FAME II scheme. Timely intervention by the government in a form of policy change is required to fuel the growth and achieve the target by the end of FY22.”
Factors Impacting Electric Vehicles Sales in India
Bank Finance
A strong banking finance mechanism is still missing in the country. Only a few banks like SBI and Axis, to name a few, are offering loans on selected models. The government should ask banks to provide loans for electric vehicles, which will augment sales.
B2B
India’s e-commerce sector has shown a steep growth curve of growing over 200% YOY; hence its dependence on logistics increases proportionately. One major reason for the growth in EV adoption by B2B players is the cash factor – electric vehicles are cheaper to maintain than ICE vehicles.
Corporates in India are also proactively transitioning towards electric vehicles. For instance, Amazon India and Flipkart have announced that they will deploy EVs in their fleet of delivery vehicles. The future of the B2B is positive, and there will be much traction coming from this segment for the next two to three years.
State Government Policy
Many states, including Delhi, Maharashtra, Andhra Pradesh, Bihar, Chandigarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Odisha, Meghalaya Punjab, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand, have rolled out their EV policy. However, some states are yet to implement the policy.
The early implementation of state-level policy could assist in creating a larger ecosystem in the country that would help the industry grow at a much faster pace. Additionally, the policies of state governments should focus on demand generation for the initial period that would help get more vehicles on the road.
Charging Infrastructure
Around 1,300 charging stations have been set up till now. Many corporates have ventured into the segment and started installing charging stations across the country. SMEV anticipates that it is possible to create a robust charging infrastructure in the country in the next five to six years.