June may be the best month for private vehicle sales despite fires denting e-scooter space: FADA

While the recent incidents of fires on electric two-wheelers have impacted the demand for these vehicles, the hit is likely to last for only a month or two, according to Vinkesh Gulati, President, Federation of Automobile Dealers Associations (FADA).

“EV enquiry levels have been going down,” Gulati said during an interview with CNBC-TV18. “You will see a subdued retail happening for at least a month or two, but this phenomenon will not continue for long," he said.

Gulati’s comments come after the recent data by VAHAN, the national register for e-services, showed that the registrations of electric two-wheelers went down by 20 percent to 39,339 in May compared to April.

While the sales of EVs had taken off significantly this year, the May numbers of top e-scooter companies like Ola, Hero Electric and Okinawa saw a substantial decline due to two key reasons — vehicles catching fire and a shortage of semiconductor chips. The FADA president said that the semiconductor issue has been solved to a large extent.

While the sales for EV vehicles have come down, the demand for internal combustion engine (ICE) vehicles has gone up. However, according to Gulati, the two cannot be compared.

"Those are two different phenomena. But overall, yes, the ICE cars are on the uptick and the order book is increasing month by month," he said, adding that he expects June to be the best month for private vehicle sales.

Multiple incidents of fires on electric two-wheelers in the last two-three months have raised concerns over the safety of these vehicles.

CNBC-TV18 had reported in May that several EV companies were likely using lower quality cells despite submitting A-grade cells for testing, taking advantage of the loosely-framed rules in the absence of surprise checks.

Following reports of defects in cells and batteries, the government is in the process of coming up with stricter standards for EVs.

But after dozens of incidents of fires involving e-scooters came another shock for buyers. A Tata Motors Nexon EV — in the first such incident involving the model — caught fire this week in Mumbai. The company issued a statement saying that a detailed investigation is underway.

"Problem with EVs catching fire lies in the battery, not in the car or bike," said Sohinder Singh Gill, CEO of Hero Electric Motors, adding that the incidents have become a global phenomenon.

Gill added that these issues have to be dealt with transparency and companies have to be proactive in taking safety measures.

"Tata incident was a rare case," said Gulati, adding that the issue that may have caused the accident could be external. However, he said the cause could be only ascertained after a report from the government or Tata.