Extension of EMPS 2024 Scheme to Support EV Two-Wheeler Sales in FY25

Chennai: Likely extension of Electric Mobility Promotion Scheme 2024 is expected to support electric two-wheeler sales in FY25.

According to Care Ratings, the two-wheeler industry is expected to sustain a steady volume growth rate of around 7-9 per cent in FY25, slightly lower than 9.8 per cent growth achieved in FY24. One of the major factors that would drive the growth in FY25 would be higher Electric Vehicle (EV) sales supported by Electric Mobility Promotion Scheme 2024.

The government had launched the Rs 500 crore scheme for electric two-wheelers and three-wheelers only till July 2024. However, the government is likely to extend the scheme till the end of the fiscal.

The overall volume growth in two-wheelers in FY23 and FY24 was supported by the increasing demand for electric vehicles (EVs). In FY23, EV sales reached around 0.73 million units, accounting for 4.54 per cent of total two-wheeler sales compared to 1.87 per cent in the previous year. FY23 saw a remarkable year-on-year growth of 188 per cent. Continuing the positive trend, EV sales grew by 30 per cent in FY24 surpassing volume of 0.94 million units.

The demand for EVs was driven by a shift in consumer preferences towards options that offer lower fuel costs, reduced maintenance, and lower servicing requirements compared to internal combustion engine (ICE) models. The government’s FAME II programme till FY24 also had made EV ownership more affordable, contributing to this volume growth.

Apart from EV sales, expectation of interest rate cuts in the second half of FY25, strong demand for new model launches, recovery in exports from its low base of FY24, and favourable monsoon which is likely to improve rural consumer sentiment and income levels, might support two-wheeler sales growth in the fiscal.