EV two-wheeler sales soared 34x in 4 years, but market share stuck at 4%: Study
In the electric two-wheeler (E2W) segment, sales jumped from 19,333 units in FY2019 to over 6.5 lakh units in FY2023. However, the adoption rate – the share of electric vehicles in overall two-wheeler sales – was only 4% by the end of 2023. 'FAME-II's higher subsidy intensity (28.65%) compared to FAME-I (14.32%) boosted absolute E2W sales by up to 9 times, but had limited impact on the overall market composition,' the report states.
According to Charith Konda, Energy Specialist at IEEFA and one of the co-authors, 'The government should continue offering purchase subsidies to sustain momentum but clearly communicate a phased-down trajectory for the longer term.'
In the electric three-wheeler passenger (E3WP) segment, early policy support under FAME-I drove a 10x market multiplier effect. Around 27,000 additional vehicles were directly attributed to subsidies under FAME-I, with total sales reaching 2.67 lakh units by March 2019. The segment, however, matured during the FAME-II period and showed limited incremental impact from later subsidies.
The electric three-wheeler cargo (E3WC) category saw a market share rise from 0.03% in 2015 to over 31% by 2023. The study found this growth was largely driven by operating cost advantages rather than central subsidies. A 1% reduction in operating cost led to a 0.563% increase in sales, highlighting the role of business economics in commercial segments.
In the electric four-wheeler commercial (E4WC) category, sales improved after FAME-II and PLI schemes were implemented. A one-standard-deviation increase in subsidy intensity led to a 5% rise in sales. However, the adoption rate was still less than 1%. States that implemented incentives saw 211% higher sales growth than those that did not.
For electric four-wheelers in the private segment (E4WP), sales grew due to new model launches and consumer demand, but adoption rates remained below 2%. The report highlights the need for continuing support in this segment.
The report found that both FAME-I and FAME-II failed to make a statistically significant impact on electric bus (e-bus) adoption. Only 4,766 units were subsidised against a target of 7,262, and the sector continues to face structural barriers such as limited financing access and high upfront costs.
'Coordinated central and state action, pairing targeted purchase incentives, infrastructure rollout, and manufacturing scale-up can help electric cars compete effectively with their counterparts in India's commercial vehicle market,' said Saurabh Trivedi, Sustainable Finance Specialist at IEEFA.
The study recommends continued fiscal support, investment in public charging infrastructure, interest rate subvention for buses, and targeted financing support for smaller commercial operators.
'As India transitions from FAME schemes to PM E-DRIVE and other similar initiatives, policymakers must recognise that each EV segment requires tailored intervention,' Konda added.
The report draws on panel data of 21,526 observations over 10 years, offering a first-of-its-kind empirical assessment of India's EV subsidy performance using econometric techniques such as difference-in-differences and synthetic control methods.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
3 hours ago
- Economic Times
Capex back at front & centre of govt's policy play as private sector watches from sidelines
The Centre is actively monitoring capital expenditure. This is because private investment is slow due to global uncertainties. The Centre's spending has increased significantly in the first two months of the fiscal year. Government's capital expenditure aims to stimulate economic growth. The government is exploring strategies to enhance economic activity. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian government is closely monitoring its capital expenditure ( capex ) as private investment remains sluggish, a trend exacerbated by global uncertainties linked to US tariffs. In the first two months of the fiscal year, the Centre has recorded a notable increase in spending, with 20% of its annual allocation utilised, compared to only 13% during the same period last year, ToI reported on July 21 citing official the past five years, the government's capital expenditure has served as a crucial policy instrument aimed at stimulating economic growth. The rationale is that increased public spending will create demand for goods and services, leading to job creation and encouraging private despite this proactive approach, the private sector remains hesitant, with investments primarily seen in sectors like cement and steel, where companies are responding to demand generated by government initiatives in segments, particularly electronics, are experiencing growth due to schemes like the Production-Linked Incentive (PLI). Yet, overall capacity utilisation in various industries is not sufficiently high to warrant significant new sectors such as automobiles and energy, the transition towards greener technologies has also contributed to delays in investment officials acknowledge the current weakness in private investment and are exploring strategies to enhance economic activity. There are discussions about increasing capex in areas with potential for higher absorptive could involve directing funds towards urban infrastructure projects, with planned discussions among the finance ministry and other government departments in the coming ahead, the government is committed to maintaining a strong focus on capital expenditure, particularly given the anticipated economic growth in the years to come. For the current fiscal year, the Centre has set a capex budget of Rs 11.4 lakh crore, with almost half earmarked for roads and hope is that as public investment continues to rise, the private sector will eventually follow suit, leading to a more robust and self-sustaining economic environment.
&w=3840&q=100)
Business Standard
4 hours ago
- Business Standard
Use a revised or updated income tax return to correct bogus deductions
Once scrutiny, surveys, or raids begin, correction options are no longer available Himali Patel Mumbai Listen to This Article The Income Tax (I-T) Department has uncovered a large-scale racket involving return preparers and intermediaries who helped clients file fraudulent income tax returns (ITRs). These returns falsely claimed deductions and exemptions. Following department outreach, around 40,000 taxpayers have revised their filings, withdrawing bogus deductions totalling ₹1,045 crore over the past four months. HRA and LTA: Heavily Misused One of the most exploited provisions is Section 10(13A), which permits exemption on house rent allowance (HRA). 'Taxpayers often submit fabricated rent receipts or falsely declare parents or relatives as landlords to their employers to claim HRA exemptions,' says Preeti Sharma, partner, tax
India Today
5 hours ago
- India Today
Haven't got your tax refund yet? Here's why it may be delayed
It's that time of year when many people are waiting for their income tax refunds to arrive. While some taxpayers have already got their money back, many are still waiting and wondering why it's taking so year, the Income Tax Department has released offline Excel tools for forms ITR-2 and ITR-3, which are used by many individual taxpayers. But there have been some early technical glitches. Due to this, some tax professionals have not yet started filing these returns for their the other hand, people who use ITR-1 (Sahaj) and ITR-4 (Sugam), mostly pensioners, salaried people and small business owners, are getting their refunds faster, as these forms are running smoothly for your refund hasn't arrived yet, here are some common reasons it might be held DEDUCTION CLAIMSSometimes, taxpayers claim deductions like HRA or medical insurance without having proper proof. If the tax department finds something suspicious, they may stop your refund and send you a notice for more IN ITR AND AIS DATAYour tax return must match the details in your Annual Information Statement (AIS) or Form 26AS. If there's a difference, your refund can get delayed until it's BANK DETAILSIf you make a mistake while entering your bank account number or IFSC code, your refund won't reach you. Also, your bank account must be pre-validated and linked correctly to the I-T ACCOUNT-PAN MISMATCHIf the name on your bank account does not match your PAN card, for example, if you have a joint account or a spelling difference, your refund can get held ISSUED BUT NOT CREDITEDSometimes, the refund is released but doesn't reach you because the account is inactive, the IFSC code has changed, or your KYC is incomplete. In these cases, you'll need to raise a refund reissue request on the I-T ADJUSTED AGAINST DUESIf you have unpaid tax from earlier years, the department may adjust it against your refund. They usually inform you about this by email or SMS. Sometimes, the full refund amount gets UNDER SCRUTINYIf your return has been picked up for extra checking or assessment, your refund will be on hold until that process is done. This can take longer than if your refund is delayed, check these points first and respond promptly to any notices from the tax department.- Ends advertisement
