EV sales fall 22% to 123,107 units in May due to incentive cuts

Mumbai: In the month of May, the ride was bumpy for electric vehicle makers in the country compared to the same month last year.

The data for the month released by the Vahan portal of the Ministry of Road, Transport and Highways, show the total EV sales amounted to 123,107 units, a decrease from 158,459 units recorded in May 2023, which also marked the peak sale of the calendar year.

Despite the year-on-year drop, May 2024 showed improvement compared to the preceding month. The sales figures of 123,107 units in May show an 8.8 per cent increase month-on-month, in contrast to the y-o-y decrease of 22.3 per cent. In April, 113,092 units were sold.

Of the total 123,107 units sold in May, two-wheelers accounted for approximately 51.7 per cent, three-wheelers comprised roughly 42.5 per cent, passenger cars made up around 5.3 per cent, and buses represented about 0.2 per cent.  The remaining vehicles, including omni,  agricultural vehicles, goods carriers, and others, collectively constituted less than 0.4 per cent of the total sales.

Analysts suggest that the sharp decline could be due to factors like changes in government policies, customers shifting interest towards hybrids, and general elections.

Electric vehicle sales peaked in March 2024, when a staggering 2009,608 vehicles were sold. Since then, sales have constantly hovered below the 145,000 mark, indicating a return to normalcy after a phase of exceptional expansion fuelled by robust incentives provided under the government’s flagship Faster Adoption and Manufacturing of Electrical Vehicles scheme, which concluded on March 31.

The industry is concerned that the anticipated increase in sales could be delayed if the government does not extend the deadline for its Electric Mobility Promotion Scheme 2024 (EMPS 2024) or introduce the third phase of FAME.