According to industry experts, the fall was due to the government’s delay in disbursal of the FAME-II subsidy as multiple companies have come under the scanner for availing of the funds either by mispricing the EVs or importing components and passing them off as locally sourced.
The Indian government has paused the disbursal of subsidies for several EV makers pending investigation.
Also read | ETtech Explainer: Why is government’s FAME-II scheme for EV companies likely to be pulled off?
Ola Electric – the only major EV maker whose sales rose in April – sold 21,845 scooters, a marginal jump from the 21,389 units sold in March. However, in a press statament, the firm claimed to have sold over 30,000 units and cornered 40% of the EV scooter market riding on its “highest-ever monthly sales in April.”
In the past, the company has said the mismatch between its sales numbers and those on the government’s Vahan portal is because some of the regions are excluded from the latter’s data.
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While initially the government was investigating EV makers like Hero Electric and Okinawa for not complying with localisation norms, later companies like Ola Electric, Ather Energy, TVS Motors and Hero MotoCorp came under the government scrutiny after a whistleblower complaint against them emerged for mispricing their vehicles to comply with the FAME-II norms. These companies billed the charger and software separately to ensure the vehicles were not priced above the threshold of Rs 150,000. ET reported on May 2 that Ola Electric will refund Rs 130 crore to customers who bought these EV chargers. Other companies are likely to follow suit.
Slowing sales
All other major EV makers saw a significant drop in their sales for April. TVS Motor saw its sales drop almost 50% to 8,727 units compared with 16,859 units in March. Ather Energy saw a 36% fall in sales to 7,737 units, compared with 12,167 units it sold in March.
The slow disbursal of subsidies has been the big reason why sales have taken a hit, said Jay Kale, SVP, equity analyst, auto and auto ancillary, Elara Capital. Some of these companies would be carrying a higher burden in terms of working capital needs that can affect deliveries of the vehicles.
“The investigation is still on, and depending on the outcomes, the sales will increase or remain stagnant. Another thing that can affect sales is that FAME-II subsidy will exhaust in the coming months,” he said. “Whether the government reduces it, increases it or stops it completely can affect the future trajectory of sales.”
ET reported on March 5 the suspension of subsidy payment under the government’s programme for promoting electric vehicles has forced several electric two-wheeler makers to go slow on production and some marginal players to shut shop.
