Sales of electric two-wheelers plummet, industry says temporary blow
Electric two-wheeler registrations fell 20% from April to 39,339 in May after a month-on-month sales increase, according to vehicle registration data on the VAHAN portal.
While industry experts said the drop in registrations in a growing market, especially with demand outstripping supply for most vehicle segments, indicates subdued sentiment, it could be temporary and not will not last beyond June-July.
Some experts said that several factors, such as supply chain disruptions and safety concerns regarding electric vehicle batteries and the build quality of existing products, have forced manufacturers to reassess their product standards, following examples of two-wheeler fires. In addition, e-scooter companies are also cautious as EV battery and safety standards are expected to be rolled out soon.
“There is some trepidation in the minds of buyers due to the numerous cases of quality issues and fires in electric vehicles that have been reported recently. While this may not result in a lasting slowdown in demand, there has been a slight drop as some customers choose to delay purchases, awaiting clarification from government and OEMs in terms of compliance with new battery safety rules. , Vinkesh Gulati, President, Federation of Automobile Dealers Associations of India, said in an interview.
Hero Electric, which held pole position in electric two-wheeler sales until a few months ago, slipped to fifth place in May, with 2,849 registrations.
“April was a month of failure for us. We were only able to resume production on May 15. It took a month and a half to resolve the supply chain issues we were facing. We uprooted and revamped our production lines and have now reached a capacity of 200,000 units. We will again become the market leader from next month,” said Sohinder Gill, CEO of Hero Electric.
“There has been a slight drop in walk-in visits for the industry following the fires, but all major OEMs now have waiting periods and demand continues to be strong,” Gill added.
In May, the major OEMs, with the exception of Ather Energy, Bajaj Auto and Revolt Motor, recorded a drop in registrations. Ola Electric, which is one of the top two players in the electric two-wheeler market, saw its registrations drop by 28%. Registrations of TVS Motor fell 69%, Hero Electric 57%, Okinawa 16% and Ampere 11%, according to VAHAN data, compiled by Elara Capital.
Electric vehicle penetration of total two-wheeler registrations in May stood at 3.2%, down from 4.1% in April. “Overperformers and underperformers at the firm level would vary depending on which firm is able to scale,” said Jay Kale, senior vice president at Elara Capital.
Hero MotoCorp, India’s largest two-wheeler maker, announced last week that it is postponing plans to roll out its first electric two-wheeler for a few months and will hit the market during the festive season, citing a shortage of semiconductors.
“Electric two-wheeler volumes fell month over month in absolute terms and as a contribution to two-wheeler volumes. This could be attributed to chip shortages leading to supply constraints and a slowdown in demand after a number of fires. The government’s position on battery safety standards and the response of OEMs to additional safety and testing requirements will be closely watched in the coming months,” Kale said.