EV Sales Decline After FAME-II Scheme Ends

EV sales were at their peak in March, mainly driven by a slew of discounts offered by OEMs.

Electric vehicle sales in India slumped 22.3 per cent year-over-year in May 2024. According to Vahan portal data, total EV sales stood at 123,107 units in May 2024, down from 158,459 units in May 2023 – the peak for the calendar year. But in April, 113,092 units of EVs were sold which is a modest 8.8 per cent sequential recovery on a month-on-month basis. 

In May, in the EV, industry two-wheelers accounted for 51.7 per cent of sales, three-wheelers 42.5 per cent, passenger cars 5.3 per cent, and buses 0.2 per cent. Other vehicle categories comprised less than 0.4%.

This sharp decline has been linked to changing government policies, shifting consumer interest towards hybrids, and the general elections. Meanwhile, EV sales peaked at 209,608 vehicles in March 2024, fueled by the robust FAME scheme incentives that concluded on March 31. Since then, sales have remained below 145,000 units, indicating a return to normalcy after exceptional growth. 

Industry executives fear further sales increases could be delayed if the government doesn't extend the Electric Mobility Promotion Scheme 2024 (EMPS 2024), a budget-limited scheme that has a financial outlay of ₹500 crore to support around 400,000 vehicles over four months, or introduce a FAME-III scheme. However, the latter is in the works.

The final guidelines of FAME-III will be fixated once the new government is formed and when the new budget is passed in July. The EMPS 2024, announced on March 13, was introduced to substitute the FAME-II incentive scheme during the election period. With the FAME-III scheme, the Government of India will most likely be focussing on boosting the sales of electric two-wheelers. To learn more about this upcoming scheme, you can read here.