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India's electric vehicle (EV) sales surged in August, rebounding from the earlier slump caused by the subsidy cut on two-wheeler EVs. Data from the government's Vahan website revealed that full EV sales reached 126,460 units in August, marking an 8.7% rise from July and a staggering 42% increase year-on-year. This growth was primarily driven by a revival in two-wheeler registrations, which jumped to 62,449 units, a 15% increment from July and 20% year-on-year. However, this data does not include sales from Telangana state and the Lakshadweep union territory.

The Indian government's decision to trim the incentive under the Fame-2 scheme for EVs from Rs15,000/kWh to Rs10,000/kWh from June impacted the sales. Additionally, the cap on incentives for electric two-wheelers was slashed from 40% to 15% of the ex-factory price. As a consequence of this subsidy reduction on two-wheelers, three-wheeler EV sales received an unexpected boost, setting a new record in August with 56,746 units.

Despite the push towards EVs, India's total vehicle sales, which also encompass traditional combustion engine vehicles, experienced a rise. According to the Federation of Automobile Dealers Associations (Fada), total vehicle sales in August escalated to 1.82 million units, a 2.7% monthly growth and an 8.6% annual increase. Three-wheeler sales were the primary contributors, recording a monumental growth of 66% year-on-year and reaching a record 99,907 units. In contrast, two-wheeler sales saw a modest growth, whereas Passenger Vehicle (PV) sales also witnessed a rise.

However, Fada has voiced concerns regarding the swelling PV inventories, which have now hit a record duration of 58-63 days, flanking a 60-day threshold. They highlighted the potential adverse effect of an expected below-average monsoon on the rural vehicle demand during the upcoming festive season. They stressed the critical need for close monitoring by original equipment manufacturers (OEMs), especially as inventory levels have surpassed a 60-day supply even before the festival period.

According to the article by Procurement Resource, India's August EV sales rebounded, reaching 126,460 units, up 8.7% from July. This resurgence, influenced by two-wheeler sales, counters a subsidy cut from the Fame-2 scheme. However, the cut spurred three-wheeler EV sales, which hit a record 56,746 units. Total vehicle sales, including traditional engines, rose to 1.82 million units, boosted mainly by three-wheelers. Yet, concerns arise as the Federation of Automobile Dealers Associations notes swelling passenger vehicle inventories and potential impacts of a below-average monsoon on rural demand during the festive season.