It's time to reflect back at 2023 and assess how the year progressed in the context of e-mobility in India. Here’s a wrap-up covering the highlights, developments, challenges and crucial learnings of the sector based on the analysis of the EV Dashboard Data.

Charting the Current : A Deep Dive into EV Sales Trends and Market Dynamics

The year started with a promising Q1, but subsidies for two wheeler Electric Vehicles (EVs) were slashed In Q2 resulting in temporary price hike and dip in sales. In May 2023, the Department of Heavy Industries announced the reduction in FAME-II subsidy for 2W EVs from ₹15,000 per kWh to ₹10,000 per kWh. This led to an average price increase of about 21% for 2W EVs. However, the 2W manufacturers quickly adapted by revising their product pricing or introducing “striped down” versions of their popular selling models.

Interestingly, despite this hiccup, Q4 ended with the highest electric two-wheeler sales ever, likely due to the increased demand around the Diwali festival and traditional year-end surge as a result of many companies offering attractive discounts (see figure 1).

Figure 1: 2022 v/s 2023 quarter-wise sales of electirc 2W in India

However, it wasn't just 2W EV sales that registered record numbers. Electric three-wheelers saw a robust 50% growth, contributing to over 54% of total EV sales in 2023. Despite the FAME-II subsidy hiccup for 2Ws, the overall EV penetration among automobile sales have never been higher with the total EV peentration in 2023 reaching 6.40%(see figure 2).

Figure 2: Penetration levels of electric vehicles in India (all vehicular segments)

Although electric 4Ws have witnessed a remarkable Year-on-Year (YoY) growth rate of 109%, reaching a sales of approximately 80,000 by the end of 2023, it has the lowest penetration rate of just about 2% among all 2/3/4Ws. The limited choice and lack of cheaper models and inadequate charging infrastructure are major reasons as to why 4W EV sales are muted. 

This is, however, likely to change in 2024. Companies like Tata and Mahindra and Mahindra have announced and/or introduced new electric 4Ws models as well as face-lifts of their existing EV line-up. This should, hopefully,  increase supply and provide greater choice to consumers. 

Beyond the Horizon : Emerging Leaders in the Automotive Industry

As we enter 2024, it's prudent to reflect on the sales of each original equipment manufacturer (OEM) in the automotive industry for the preceding year. A notable trend is the remarkable surge in electric vehicle (EV) sales for most manufacturers, showcasing significant growth compared to the previous year (2022).

In the 2W EV space, Ola continues to beat the competitors with the highest sales. Ola sold over 2.66 lakh EVs and gained a market share of 31% up from 17% in 2022. TVS motors, sans the fanfare, has slowly been establishing itself as the number 2, with approximately 1.66 lakh sales, gaining a market share of 19%. Ola and TVS combined had 50% market share in the 2W EV space in 2023.

Figure 3: Sales of the top five two wheeler OEMs (2022 v/s 2023)

In contrast to 2W EV OEMs, the 3W EV market segment is extremely fragmented, with 496 different OEMs registered as per the Vahan Dashboard. However, the 3W EV sales are concentrated in specific regions. Uttar Pradesh (UP) is the epicentre of the EV revolution especially for the 3W segment. EV sales accounted for over 81% of all 3W sales in UP, a remarkable feat in pushing cleaner and greener transportation. 

Figure 4: Sales of top five three wheelers OEMs (2022 v/s 2023)

Meanwhile, TATA motors seems to have taken a pole position in the 4W EV segment. Unlike the market leader in 4W ICE, Maruti Suzuki, Tata has taken an aggressive stance of transmuting itself into an EV company. TATA has a market share of over 70% among 4W EV sales. It wouldn’t be wrong to say that TATA is single handedly driving the 4W EV segment in India as of now. M&M, despite its earlier start in the EV segment with the acquisition of Rewa Motors (rebranded as e2O) , has failed to capitalise on its first mover advantage, and is yet to take its electric strategy seriously.

Figure 5: Sales of top five four wheeler OEMs (2022 v/s/ 2023)

Electrifying Change : Analysing State Efforts to Drive Electric Vehicle Adoption

Sales growth has been robust in most of the top ten states with an annual increase of over 50% in most states. Notably, Kerala has noticed the highest sales growth (~88%) - a near doubling of the market since last year, followed by MP (~82%), UP (70%) and Goa (66%). Smaller states such as Goa and Kerala are registering high sales numbers, largely due to increased 2W sales. 

Figure 6: States with highest sales growth

Other small states such as Tripura are doing well in 3W sales, reinforcing the observation made in one of the last articles that there are two factors driving EV sales; One, EV as a means to livelihood (3W) and EV as an aspirational lifestyle product (2W and 4W).

Delhi has set an example for other states with the adoption of an EV fleet of buses. Delhi's remarkable investment in EV buses is starting to show results. The state nearly tripled its EV fleet from 400 buses to 1,100 buses - a remarkable feat. Neary 58% of all bus sales are now EVs. 

Figure 7: States with highest EV bus penetration

The other two states that have continued their investment in electric public transit are Maharashtra and Karnataka, both states deploying 300-400 new buses. However, overall, country wide penetration levels of buses remain at only 3.5%, indicating that perhaps a national e-bus policy is needed. Further, the number of buses per capita in most of India urban centres remains very low, indicating the need for massive investment into clean public transit.

In terms of EV adoption and penetration (% EV sales in comparison overall sales), Chandigarh has moved up the ranking most, to rank 1 in 2023 from rank 10 the previous year. This is attributed to its aggressive EV policy which aims to make the city a ‘Model EV City’ by achieving one of the highest penetration of zero emission vehicles in the country. Additionally, its generous EV incentives have aided in bringing down the sticker price of an EV.

Despite challenges, 2023 paints a promising picture for India's EV future. Regional players are emerging, Tata Motors leads the charge in 4Ws, and states like Kerala and Delhi and Chandigarh (a union territory) showcase proactive leadership. However, affordability, availability of models (especially in the 4W segment), inter-city charging infrastructure, and continued fiscal support remain crucial to truly accelerate the EV revolution. As we move forward, one thing is certain: India's EV story is just beginning, and it promises to be an exciting journey with many more chapters to unfold.