Sales of electric two-wheelers may miss FY23 target of 10 lakh units: SMEV

Sales of electric two-wheelers could miss the target of 10 lakh units in the fiscal year 2022-23 by 20 per cent, mainly due to withholding of around ₹1,100 crore subsidy by the government, industry body SMEV said. This year, sales of electric two-wheelers stood at around 6 lakh units, with three major electric two-wheeler makers - Hero Electric, Ola Electric and Okinawa - crossing the one lakh annual sales-mark for the first time, as per the Society Of Manufacturers Of Electric Vehicles (SMEV).

These original equipment manufacturers (OEMs) dominated the electric market, controlling over 50 per cent of the total market share, and emerged as the top players in the category.

The performance of the electric two-wheeler industry in the calendar year 2022 looks positive with sales of around six lakh units, "the volumes are not keeping up with the projections made by Niti Aayog and many other research agencies", SMEV said.

However, it added that December has raised a red flag for the industry as it has witnessed a 28 per cent dip in sales, reaching a total of only 59,554 units compared to 76,162 units in November, 22, as per data on the VAHAN portal.

Multiple factors have resulted in sales curve of the two-wheelers sector falling in the last two months of the year, the foremost being the blockage of ₹1,100 crore plus subsidy of majority of the players for many months that has squeezed the working capital of major OEMs, said SMEV Director General Sohinder Gill.

The government received complaints mainly related to violation of Phased Manufacturing Programme (PMP) guidelines and these had been referred to the testing agencies for re-verification. Following this, in respect of two OEMs, their models have been suspended from the FAME scheme and processing of their pending claims has been stopped till they submit sufficient evidence to show their compliance to PMP timelines, he said.