The electric vehicle (EV) penetration improved in the Indian two-wheeler (2W) sector over the last two months after incentives almost halved in April, a report said on Thursday, adding that Ola Electric lost market share while TVS Motor Co Ltd (TVSL) gained.

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The electric 2W penetration and volumes recovered and it is now higher than that of FY24, according to the report by BNP Paribas India.

“E2W sales volume saw strong growth YoY on a low base. Penetration improved month-on-month. TVSL gained market share for the second consecutive month, while Ola lost,” the report mentioned.

Electric passenger vehicle (EPV) penetration deteriorated slightly month-on-month where Tata Motors lost market share while MG gained.

In the electric three-wheeler (E3W) space, volumes went up YoY but declined month-on-month in June.

“In policy news, the FAME III incentives could be announced in the Union Budget and Delhi's EV policy has expired which could lead to e2W and e3W price increases,” said Kumar Rakesh, analyst, IT and auto.

Meanwhile, another report last month said that with an improving adoption rate, electric car sales in India are likely to reach 1.3-1.5 lakh in the current fiscal year (FY25).

After a record growth of 90 per cent with volumes at 90,432 units in FY24, the electric car penetration is consistently increasing in the country, driven by the government's efforts towards a more sustainable, environmentally friendly, and efficient transportation sector, according to a CareEdge Rating report.