Sale of 3-wheeler EVs Plunges By Nearly 50% Amidst Growing Demand of Passenger Vehicles

Despite the festive season and a growing demand for passenger vehicles (PVs), three-wheeler electric vehicles (EVs) or e-rikshaws sales have plunged by nearly 50 per cent in the month of October according to the latest data released by Society of Indian Automobile Manufacturers (SIAM) on Tuesday.

At a moment when road transport and highway minister Nitin Gadkari noted that EV makers will not require government subsidies due to its increasing demand among the consumers, SIAM data highlighted that only 2,085 e-rickshaws were sold in the month of October as compared to 4,124 during the same period last year, thereby registering a 49.4 per cent fall in the sales.

Usually, businesses in India look forward to the festive season with high optimism as this period gives significant boost to the sales. However, this year, the overall sale of passenger vehicle sales remain mostly unchanged with a slight rise of 0.9 per cent increase on year-on-year basis, revealed SIAM in its report.

“October 2024 saw two major festivals Dussehra and Diwali, both occurring in the same month, which traditionally drive higher consumer demand providing a significant boost to Auto industry’s performance," said Rajesh Menon, Director General, SIAM.

Previously, Outlook Business reported that the buyers of e-rikshaws struggle to get loans from the banks. Eventually, they had to rely on non-banking finance companies (NBFCs) to get loans at a high interest rates to buy EVs in the three wheeler categories. While the fall in sale is highest for e-rikshaws, the sale in the overall three-wheeler passenger vehicles also dropped.

"However, three-wheelers marginally de-grew by (-)0.7% compared to October of previous year, with sales of 0.77 lakh units in October 2024, although there was growth of 11 per cent in registration, compared to last October,” Menon added.

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Initiatives for EV Adoption

According to Society of Manufacturers of EVs, two-wheelers and three-wheelers accounted for more than 94 per cent of EV sales in FY25. However, the data compiled by Niti Aayog on e-Amrit, the web portal for EVs, shows that loans to finance EVs, particularly two- and three-wheelers, came from 11 non-banking finance companies (NBFCs). Outlook Business had learned while many banks have 100 per cent loans for four-wheeler EVs but none for two- and three-wheelers.

The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme phase-II, was implemented in April, 2019 for a period of five year with Rs 10,000 crore budget allocation, with an aim to support five lakh e-three wheelers, among others The government set a target of having EV sales penetration of 30 per cent of private cars, 70 per cent of commercial cars, 40 per cent of buses and 80 per cent of two and three-wheelers by 2030. India's EV penetration in FY24 stands at 6.8 per cent as compared to 5.3 per cent in FY23.