The passenger electric four-wheeler segment saw its biggest-ever monthly drop in volumes in June, weighed down by the withdrawal of government subsidy.
The segment saw a 14% year-on year (y-o-y) drop in retail sales to 6,894 units during the month. The decline was led by a 21% contraction in volumes by market leader Tata Motors, whose share has fallen further to 63% as of June.
The electric four-wheeler segment had witnessed strong growth in the past few years, with monthly volumes doubling every month in FY24. This was largely driven by demand from the early adopters and measured launches by companies, including luxury brands.
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The drop comes amid a strong push for hybrids by players such as Maruti Suzuki and Toyota Kirloskar, which have been positioned as alternatives for the battery electric vehicle. Additionally, CNG-powered cars, whose running costs are better than petrol ones and therefore are preferred by fleet buyers, have continued to expand their share.
According to data shared by the Federation of Automobile Dealers Association (FADA), Tata Motors EV four-wheeler sales dropped to 4,346 units in June. However, JSW MG Motor India, the second-largest player in the segment, saw a growth of 21% y-o-y to 1,405 units.
Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said: “The EV industry was affected by the broader industry trend and the impact of significant preponement of fleet sales in Q4FY24 due to the expiry of FAME II subsidy in March 2024.”
“Consequently, while the personal segment retails have grown slightly, there was a sharp decline witnessed in the fleet segment, which is expected to recover in the coming quarters,” he added.
During FY24, electric four-wheeler volumes closed at nearly 90,500 units – almost double than that clocked in FY23. Volumes in FY25 are expected to close between 130,000 and 150,000, as per CareEdge Rating.
Despite the push, the penetration of electric powertrain in India’s four-wheeler segment remains just 2%. However, companies are still gearing up to launch 6-8 cars in the segment before the end of FY25 across sub-segments.