Blame three-wheelers! EV sales slump 20% in FY21

Sale of electric vehicles recorded a 20 percent slump in fiscal 2021 largely due to a steep 37 percent crash in electric three-wheelers - the largest segment, during the year. The fiscal saw registration of 134,619 units as against 168,311 units in fiscal 2020, data collated by CEEW Centre for Energy Finance's (CEEW-CEF) shows. This was the first time since fiscal 2015 that the category has recorded a decline.

The biggest impact of Covid was on three-wheelers where sales declined from 140,683 units in fiscal 2020 to just 88,378 units in fiscal 2021. Two and four-wheelers however ducked the trend registering impressive growth during the year albeit on a relatively small base. After posting a marginal decline in fiscal 2020, electric two wheelers grew to 40,837 units last year from 24,839 units in the previous year.

Two and three-wheeler EV sales accounted for nearly 96 per cent of all EV sales in the country in FY21 even as the share of three-wheeler, due to the slump in sales, has declined to 65 per cent from 83 per cent. At the same time, share of two-wheeler EVs, including those that have speeds greater than 25 kph, has grown to 30 per cent from 14 per cent.

There has been a sharp uptick in sale of electric cars as well, which grew from 2,727 units in fiscal 2020 to 4,588 units in FY 2021 largely due to greater number of launches in this segment. With over 23 new electric car models slated for launch by fiscal 2022, this segment is expected to show strong growth in years to come. Electric vehicle registrations now account for the highest ever share of 0.88 per cent of all vehicle registrations in the last financial year. The Indian automobile market has registered over 6.38 lakh EVs since 2011-12.

"Electric mobility is poised to be at the forefront of India's green recovery. In the coming years, the Central and state governments need to reduce uncertainty by rolling out detailed and clear long-term policies," said Arunabha Ghosh, CEO, CEEW. "Further, targeted efforts are needed to solve critical challenges such as higher upfront cost of EVs, lack of end-user financing, consumer's range anxiety, and inaccessible charging. The CEEW-CEF dashboard provides key information of over 600 public charging stations in the country."

With just a year left of the government's flagship FAME II scheme that incentivises electric vehicles in the country, it is highly improbable that the targets would be met. So far only only 4.25 per cent of the sales targets have been met. The major barrier according to CEEW is lack of awareness about the scheme among potential EV buyers.

The top 10 EV states in the country made up 88 percent of the overall sales with UP, Bihar and Karnataka the top three in terms of volumes. Tripura has the highest share of EVs in percentage terms as compared to combustion engine vehicles.

"Uttar Pradesh, Bihar, and Karnataka were the top 3 states in terms  of EV sales in FY21. Uttar Pradesh alone contributed 23 per cent of the country's sales, with 31,584 EVs sold in FY21," said Meghna Nair, Analyst at CEEW-CEF. "The top 10 states together made 88 per cent of all EVs sold in India. Tripura, however, leads with the highest share of EVs per 1,000 internal combustion engine (ICE) vehicles, with 52 EVs sold for every 1,000 ICE vehicles in FY21."

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