HomeGovernment PoliciesEffect of subsidy cut? E2W sales decline 62% in June, so far

Effect of subsidy cut? E2W sales decline 62% in June, so far

The vast decline in the sales of electric vehicles in June has come to a shocking percentage of 62%. Not only has it turned the sales volume down in the first 15 days of June 2023, but it has also turned down many other aspects. This decision has also received reactions from the CEOs and founders of reputed companies in electric vehicles.

This entire issue credits its existence to the revision of an act that the national Government had earlier planned. In this write-up, we shall discuss the onset of this act, its impact on the present sector, and its impact on the future.

An essential background of the subsidy and the act in a nutshell 

The Government has recently identified its responsibility in the sector of electric vehicles and their contribution to technology. The Government decided to revise the FAME (Faster Adoption of Manufacturing of Electric Vehicles in India) subsidy act for the electric two-wheelers and four-wheelers. The revision in this act was supposed to be from June 1, 2023. 

The most widespread impact of this act was the subsidy reduction that the Government provided for electric two-wheelers and four-wheelers. It brought a change in all aspects of the electric vehicles sector. Right from the adoption of electric vehicles to their sales, everything has experienced its impact. 

  • The revised incentive sum for electric two-wheeler demand is 10000 per kWh.  
  • The hike in the sum of the incentives for electric two-wheelers would be 15% of the prices that used to exist earlier before the revision of subsidies. 
  • All these points have referred to the sensitivity of the prices in the Indian market. The Indian market doesn’t have a firm establishment of ownership.
  • Most of the petrol vehicles in India cost less than Rs.1 lakhs. This cost factor reduces the chances of spending more than 1.5 lakhs on electric vehicles. 
  • The present adoption of electric vehicles is just 4.9%. Many officials are expecting a rise of 20% in this present percentage of adoption. 
  • The Ministry of heavy industries may need help to achieve its target of completing 1 million sales in 4 years after the revision of this subsidy amount. However, they may consider their target to complete the implementation of this revision. 
  • The Ministry had no choice except for the subsidy reduction for the remaining year. The Government had to withdraw the money not spent from the E3W budget. 

The present transformation in the subsidies that the Government planned earlier is just pushing the market towards the point where every customer would be ready to go with the adoption of electric vehicles. It has many more aspects that both sides of the industry look upon with different views and opinions. 

How has the subsidy cut changed the market scenario for E2W sales? 

The news that the sales of electric vehicles have come down to a percentage of more than sixty per cent is an indicator of many upcoming changes. It is challenging to scale all the goals and objectives. However, it is evident through the reactions and comments of people from the same industry.

Kabra- the CEO and Co-founder of VoltUp, has reacted to this latest decision. He stressed having a different view of this act. He holds a positive opinion in terms of this act. He has made the impact of this act clear: 

  • He said that reducing this subsidy to 15% for electric vehicles has increased the demand for electric vehicles in the market. 
  • The immediate reduction in the decline of sales of electric vehicles is a short-term impact along with the price rise. This decision would have a long-lasting impact on making the Indian electric vehicles sector independent. 
  • He invited the collaboration of the industry and Government to create an infrastructure of cohesion and modern mobility lifestyle assistance to grow and develop with the industry. 
  • He insisted on manufacturing products that were cost-effective and efficient in terms of performance. 
  • The founder and CEO of HOP Electric Mobility, Nikhil Bhatia, said that the Indian electric vehicles sector needs to be independent and learn the current trends. This decision to subsidy cut was the first step towards this change. 
  • They needed an approach in terms of long duration to pursue the advancement and sustainability of electric vehicles in India’s current and future sectors. 
  • He also said this subsidy cut was necessary for today’s electric vehicles sector.

The impact on the selling prices of the top electric vehicle manufacturing brands depends on the brands’ decisions. These are some of the latest changes and revisions that many sellers have introduced in their selling prices: 

  • The rise in the prices of Ola Electric was Rs. 15 000 for all its scooters.
  • The hike in price of electric bikes manufactured by Matter has increased by Rs. 30 000.
  • The price of the electric scooters introduced by Ather Energy has been raised from Rs. 25 000 to Rs. 30 000.

The rates of electric vehicles manufactured by different brands are experiencing a hike due to the price rise by these famous brands. According to some experts, this price rise is a short-term impact. However, it s up to the future. 

The overall view of the growth and development of electric two-wheelers adoption and sales is a topic of debate for manufacturers and consumers. While one side of the industry considers it a mandatory step to reduce dependence, the other considers it the reason for destroying the consumers’ budget. Therefore, it is a topic of research and study of figures in te future. 


The reduction in the subsidy the national Government used to provide for electric two-wheelers and four-wheelers has proved devastating. However, there are a few more implications to this act of reduction. All these factors have been discussed in this write-up in detail. It is apparent from this write-up that the consequences could have been better for the sales of electric vehicles. Despite all these steps, India would welcome the development in fuel technology and development. 



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