The whole EV market has grown at a healthy rate in the past 2 months, but in the month of December, it struck with a major setback in December, and all the EV bars have fallen by up to 20-50%. Such a drop in EV sales can’t be coincidental, and there has to be a solid reason behind it. So, in this article, we’re gonna look at the key reasons behind this fall & its future prospects and briefly comment on the perspective of electric vehicles among Indian customers.
Overall EV sales in November vs December 2023:
Let’s first look at the monthly EV sales report and measure how red the market conditions.
Sr. No. | Company Name | Sales in Nov. 2023 | Sales in Dec. 2023 | MoM Growth |
1 | Ola Electric | 29,908 | 30,219 | 1.03% |
2 | TVS Iqube | 19,076 | 12,216 | -35.96% |
3 | Bajaj Chetak | 11,810 | 10,323 | -12.59% |
4 | Ather Energy | 9,256 | 6,481 | -29.98% |
5 | Greaves Electric (Ampere) | 4,412 | 2,974 | -32.59% |
6 | Hero Vida | 3,043 | 1,592 | -47.68% |
7 | Joy E-Bikes | 1,188 | 1,407 | 18.43% |
8 | BGauss Auto | 1,606 | 1,214 | -24.40% |
9 | Okinawa Autotech | 1,258 | 965 | -23.29% |
10 | Lectrix EV | 1,297 | 769 | -40.70% |
| Total EV 2wheelers | 91,172 | 75,366 | -17.34% |
So, the monthly drop was 17.34%, which is a big number for the industry as a whole.
The same condition is with the electric bike market:
Company Name | Sales in Nov. 2023 | Sales in Dec. 2023 | MoM Growth |
Revolt Motors | 669 | 678 | 1.34% |
Tork Motors | 395 | 205 | -48.10% |
Hop Electric | 112 | 81 | -27.68% |
Ultraviolette | 10 | 10 | 0% |
Kabira Mobility | 46 | 50 | 8.70% |
Total | 1232 | 1024 | -16.88% |
Here also, EV sales have dropped a significant level, and it’s the same with the electric 4-wheeler industry also.
Now that it’s clear that EV sales are dropping across the different market segments, let’s understand why this steep drop is happening and what’s the solution to it.
The Reason behind EV Sales Winters:
Comparing previous year reports, it’s evident that the EV sales drop in every cycle of December month, so it is fair to assume that this drop is not something that shows losing customer interest but something seasonal. Here are some reasons that can explain the drop in EV sales in December:
- End of Festive Season:
December falls in a very challenging environment where it’s right after the festive season and just before the new year offers, and most customers wait for the sales season to start before purchasing a vehicle, which hurts the December EV sales numbers. In such dry market conditions, it is rare for any EV maker to succeed in delivering positive results.
However, Ola miraculously showcased a positive number and, slashing all its previous records, registered the highest EV sales in a month, crossing 30k units per month.
- Upcoming Launches:
It’s common in the EV community to launch upcoming products with the start of a new year. It gives brands a fresh start to the year and maintains a level of enthusiasm among the customers for the launch of new products. The anticipation among consumers for upcoming lucrative EV offers discourages a lot of potential customers from buying an EV in December and inspires them to purchase after looking at all the launches, becoming another reason for this dampening EV sales.
- Rising EV prices:
On average, the price of an EV gets much higher in December than the previous month, and that’s due to the festive offers. The most cost-effective time to purchase an EV is during the festive season, and the least profitable time is during December, which becomes another potential reason behind the drop.
The Observation:
Let’s look at some observations to give our report a strong base. Last month, the biggest offering was given by Hero Vida, wherein the company gave 30,000 straight off on their scooters, and people bought the scooters aggressively, but this month, as the offer waved off and the price of the scooter goes to the original EV sales dropped significantly by 50%
Which means Higher offers == Bigger MoM drop.
At the same time, Ola Electric didn’t give higher price cuts but focused its strategy on offering more perks as festive offers, which helped them maintain a good balance between MoM fluctuating prices. With this strategy, Ola didn’t surprise customers and maintained a healthy growth curve.
Future prospects: Will this EV drop continue?
No, this rise-and-drop cycle is common for the auto industry, and this drop doesn’t conclude that people are losing interest in EVs, and the YoY growth tells a completely different story:
YoY growth of electric vehicles:
The overall EV sales in December 2023 witnessed a decrease of approximately 7.66 % from last month, reaching 1,40,839 units. On a y-o-y basis, EV sales in December 2023 increased by 37.79% from that of EV sales in December 2022. – JMK Research
So, people are showing more interest in electric vehicles. It’s just that this month has witnessed a drop in the future, and in upcoming months, this will get normal. With the upcoming EVs launched like Ather Apex, Bajaj Chetak Urban, etc., the EV sales will grow.
Perspective of electric vehicles among Indian customers:
Customers’ curiosity about electric vehicles is growing, and more and more people are willing to get an EV. But still, there’s a large room of people with various myths and misunderstandings about electric vehicles. Here are some of the myths people have about electric vehicles:
- Range anxiety: The limited range of most EVs compared to petrol/diesel vehicles remains a major concern, particularly for long-distance travel. The lack of a widespread charging network further fuels this anxiety.
- Higher upfront cost: Despite subsidies, the initial price of EVs remains a barrier for many budget-conscious consumers. This is especially true for four-wheeler EVs compared to two-wheelers.
- Charging infrastructure concerns: The limited availability of charging stations outside major cities makes owning an EV inconvenient for many. The fear of not finding a charging station when needed deters potential buyers.
- Battery life and replacement costs: Concerns about battery degradation over time and the high cost of battery replacements deter some potential buyers. The lack of awareness about battery warranties and recycling options adds to the scepticism.
Conclusion:
In summary, the 17% monthly decline in EV sales in December 2023 seems to be a regular year-end phenomenon rather than an indication of waning EV adoption in India. Multiple factors, like the end-of-festive offers, impending new model launches, and temporary price hikes, contribute to the annual December dip.
However, the robust 37% year-on-year growth proves that consumer interest in EVs continues upward. Concerns around range, charging infrastructure, high pricing, and battery lifespans persist among some customer segments. But awareness and demand will likely keep rising with more model options, policy support and charging network expansion.
Major OEMs need to relook at discount-heavy tactics and pursue consistent value pricing. With exciting launches lined up for 2024 from companies like Ather, Bajaj and others, India’s EV revolution remains firmly on track. The December blip notwithstanding, the country’s two-wheeler market is expected to witness record EV uptake in the coming year as affordable products help electrification go mass market.
So, while the December 2023 sales decline seems dramatic, it does not indicate fading popularity or a loss of momentum for EVs in price-sensitive India. It is just an expected seasonal effect that gets magnified compared to record festive period sales. The long-term outlook remains highly promising.
