Sales of electric two-wheelers suffer dent in April

Though the market saw big-volume production in 2019-21, it had suffered badly, all thanks to the non-existing supply chain, worsened by the Covid pandemic

Electric two-wheeler registrations have plummeted by nearly a fourth to 62,581 in April from 82,292 in the month of March, a report in Business Standard said, citing data from VAHAN.

In the last four months of this calendar year, many electric two-wheeler companies, including Okinawa, Hero Electric, Ather Energy, and TVS have got very low registrations.

But the report adds that Ola Electric has been the only exception as it got 21,560 registrations in April, incidentally, the highest in this calendar year.

Also Read: Ola Electric to open 500 experience centres across India by March this year

The pecking order

Such a scenario has only induced changes in the two-wheeler pecking order. The Bajaj Auto and Chetak Technologies combine has secured a place in the top five in the month of April. Ampere has replaced Ather to occupy the third spot.

Reason for electric two-wheeler market suffering

The report adds that the Department of Heavy Industries (DHI) received a whistleblower complaint, based on which it has taken punitive action on Hero Electric and Okinawa. It adds that the two companies have been put under audit investigation. The two companies face investigation for breaking the localisation requirement of 50 per cent on their scooters, without which subsidies cannot be given.

Drop in registrations

The two companies have suffered a dramatic 43 per cent drop in April over March, thereby pushing their share in the market to a paltry 10 per cent. Interestingly, in 2022, they had 31 per cent market share.

Another fact to be noted here is that a whopping sum of Rs 1,200 crore in the form of subsidies is stuck in relation to this issue. It is these two players who have a bulk in this.

The report notes that if the DHI action is not challenged, the two companies could face trouble as they have paid subsidies to the customers in the hope of disbursements.

There are also talks of the companies being asked to give back the subsidy.

“If and when we get it, hopefully, it would open the doors for dialogue and resolution rather than the stalemate for the past 15 months,” Sohinder Gill, Chief Executive Officer of Hero Electric was quoted by the publication.

The effect of Covid on the supply chain

Though the market saw big-volume production in 2019-21, it suffered badly, all thanks to the non-existing supply chain, worsened by the Covid pandemic in 2020 and 2021.

However, it was a different story for companies such as Ola, Bajaj, TVS, Kinetic and Okaya as they entered the market late and the supply chain began to see improvement.

The DHI has been severe on other companies like Ather, Ola, TVS and Hero Motocorp too. The reason is that these companies have allegedly violated subsidy norms by having separate charges for accessories (chargers) instead of making it a part of the ex-factory price.

Though the issue is getting resolved, it has certainly created a huge void in registrations.