Two-wheeler EV makers jostle for festive-season boost amid reduced subsidies | Mint

Two-wheeler EV makers jostle for festive-season boost amid reduced subsidies

Both Ola Electric and Ather are offering a  ₹5,000 discount on their most affordable scooters (Photo: Bloomberg)
Both Ola Electric and Ather are offering a 5,000 discount on their most affordable scooters (Photo: Bloomberg)

Summary

  • Bajaj Auto, TVS, Hero, Ola Electric and Ather have lined up large cash discounts and other incentives as the industry looks to recover from subsidy-related setbacks

New Delhi: Top electric two-wheeler makers are rolling out retail incentives to make the most of the upbeat buying sentiment during the festive season, at a time of intense consolidation and lower subsidies.

Bajaj Auto Ltd is offering lower prices for its Chetak EV at 1.15 lakh ex-showroom in Bengaluru and Chennai, while it costs 1.20 lakh ex-showroom in other cities. The company is looking to ramp up sales to 10,000 units a month, after having brought down prices from 1.45 lakh to 1.30 lakh a couple of months ago.

TVS Motor Co., which sells the popular iQube electric scooter, is advertising festive offers worth 10,000, including a cashback offer. Hero MotoCorp’s Vida V1 is being offered with benefits of 21,000, including a 2,000 cash discount.

Leading electric two-wheeler startups Ola Electric and Ather Energy launched exchange bonuses and cash discounts on their scooters in a bid to market their new products and variants following reduced FAME-II subsidies (which earlier offered cash incentives of up to 40,000 per electric scooter). This has also triggered a new ‘sweet-spot’ for price points in the market.

Ather Energy is offering 5,000 cash discount on newly launched Ather S, its most affordable electric scooter in the market, while Ola Electric is giving 5,000 discount on its Ola S1X, also its most accessibly priced product. Ather expects its sales to rebound to pre-subsidy volumes by the end of the festive season.

“In October, we witnessed a significant increase in inquiries and test rides as the festive season began. To accelerate this momentum further during the festive season, we introduced lucrative offers for customers interested in upgrading to Ather scooters. These offers are available nationwide for the 450X and 450S until 15 November," Ravneet Phokela, chief business officer, Ather Energy, said. “The market continues to consolidate. We expect the market to bounce back to pre-subsidy numbers by the end of festive season."

Ola Electric said it is seeing an increase in turnout at its experience centres following the launch of the S1 X+, its cheapest variant so far. “Our sales have gone through the roof this Dussehra and Navratri. Selling a scooter every 10 seconds right now, and almost 2.5x of last year," Bhavish Agarwal, founder and chief executive posted on X. However, he did not clarify for how long it had been observing the trend.

All leading two-wheeler original equipment manufacturers (OEMs) had to raise prices and quickly introduce cheaper variants due to the impact of reduced FAME-II subsidies after July. Amid growing consolidation in the e-2-wheeler market, the top four consisting of Ola Electric, TVS Motor, Ather Energy and Bajaj Auto, account for almost 80% of the industry’s volumes, making retail success crucial for growth.

The electric two-wheeler industry, after setbacks because of subsidy reductions, is now showing signs of recovery, with companies launching new low cost models.

Sales of high-speed electric two-wheelers rose 20% in September from a year ago and 2% from the preceding month, for a total of 63,716 units, according to the government’s Vahan database, which records vehicle registration data. “With supply improving and prices increasing after the reduction of FAME-II subsidies, demand had moderated to a certain extent. All the leading two-wheeler OEMs are also yet to launch another set of new lower-priced variants, owing to which there are some discounts being offered in the market," Jay Kale, analyst at Elara Capital said.

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