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 Electric two-wheeler (E2W) sales volume in India rose 17 per cent year-on-year in December as electrification improved after a recent hiatus, a report showed on Wednesday.

In the E2W space, Ola Electric (Ola) remained the market leader by volume and gained market share, reaching 40 per cent.

Ola gained the most market share, followed by Bajaj Auto while TVS Motor lost the most, according to BNP Paribas India EV report.

“Improvement in Ola’s market share was largely driven by the company’s aggressive marketing campaign 'December to Remember', under which it offered aggressive discounts to customers and also reduced prices of its products,” the report mentioned.

Ola slashed its S1X+ e-scooter prices by Rs 20,000 or by 18 per cent. Among the states, sales volume declined (month-on-month) for most of the states except Delhi, West Bengal and Uttar Pradesh.

Penetration improved the most in Delhi to 19.8 per cent from 6.9 per cent in November, almost entirely driven by Ola.

"We continue to see OEMs launching lower-priced models and offering aggressive discounts as a positive catalyst for EV adoption. However, discontinuation of FAME (if it happens) could pose a near-term headwind,” the report said.

EV penetration improved in December for electric passenger vehicles, electric three-wheelers and electric two-wheelers – reaching all-time highs for E3Ws and nearing all-time highs for EPVs.

“Since its fall post the incentive reduction on E2Ws, penetration has consistently improved and has likely normalised to levels seen before subsidy cuts. The Bihar government unveiled a new EV policy for the next five years,” said the report.