FAME 2 Subsidy To EMPS Transition Affects Electric Bikes And Electric Scooters Sales

Lower subsidies on electric two-wheelers seems to have pushed customers away

FADA (Federation of Automobile Dealers Associations) has released the electric two-wheeler sales numbers for April 2024, and they are not looking as positive. Almost all major electric two-wheeler manufacturers have reported a drop in their sales numbers compared to March 2024. Some of them have even reported a drop in sales from that of April 2023. 

That said, Ola Electric has reported a sales of more than 33,000 units in April 2024, which is almost half the total electric two-wheeler sales for the month. Below are the full sales numbers:

The dip in sales numbers mainly due to EMPS (Electric Mobility Promotion Scheme 2024) replacing the FAME 2 subsidy. EMPS reduces the cost benefits the end consumers get. However worth noting is the fact that March sales were high as electric two-wheeler manufacturers had lucrative offers for customers. That combined with the then applicable FAME 2 subsidies should have helped pull in more new customers. In fact, Ola Electric reported its highest ever sales in March, crossing 50,000 units. 

Despite the massive drop in sales in April, the Bengaluru-based EV maker still has the lion’s share in the EV market with a considerable lead on the second best-selling scooter, the TVS iQube. Ola’s dominance comes from the fact that it offers a range of electric scooters at different price points, starting from Rs 69,999 for the Ola S1X, going all the way to Rs 1,29,999 for the Ola S1 Pro. None of the other two-wheeler brands has such a varied range, especially in the premium segment.

That said, manufacturers like TVS have started taking corrective measures by introducing more variants, including more affordable ones. Additionally, some manufacturers have also resorted to reducing prices to cushion the blow. Revolt has reduced the prices of its electric bikes, and so has Ampere, for a select range of electric scooters. Reducing subsidy in such a phased manner may hinder sales in the short term but in the long run, it encourages manufacturers to streamline and optimise their manufacturing process and supply chain, and come up with electric bikes and scooters that are affordable, and not dependent on subsidies.