The electric two-wheeler market in India has experienced remarkable growth in recent years, emerging as a key driver of the country’s EV revolution. These agile and innovative vehicles now account for nearly 55% of all EV sales, outpacing the growth of electric three-wheelers and four-wheelers. According to recent data, approximately 0.94 million electric two-wheelers were sold in FY24, marking a 30% increase compared to the previous year. This surge underscores the rising popularity of these eco-friendly mobility solutions.
Key factors fueling this growth include heightened environmental consciousness, evolving consumer preferences, and increasing urban congestion. Additionally, government initiatives like FAME-II and the Electric Mobility Promotion Scheme (EMPS) have played a pivotal role in driving this trend. These forward-looking policies have boosted awareness and encouraged adoption through incentives such as tax benefits and subsidies, significantly contributing to the sector’s impressive performance.
The electric two-wheeler market is thriving, with numerous companies offering a diverse range of scooters and motorcycles tailored to various consumer segments. This rapid growth has drawn a surge of new startups into the industry, while established players are pushing the boundaries of innovation to maintain a competitive edge. Key advancements are centered around battery technology, extended vehicle range, and enhanced features, all designed to provide consumers with affordable and efficient options.
Additionally, significant investments in the sector are enabling companies to scale operations, enhance product portfolios, and explore cutting-edge technologies. Collaborations between automakers and tech firms are further accelerating the development of essential charging infrastructure, which is vital for the sector’s continued expansion. These dynamic developments are propelling the industry forward, setting the stage for an exciting future in the electric two-wheeler space.
Having reached this remarkable milestone, it is important that we strategically plan for the journey ahead. One pressing issue that demands immediate attention is the lack of EV charging infrastructure, particularly in tier-2 and tier-3 cities. The absence of easily accessible charging stations is hindering consumers in these cities from making the switch from traditional petrol-powered two-wheelers to electric ones. These cities, with their significant population density and a widespread use of two-wheelers, hold immense potential to drive the next wave of growth in the electric two-wheeler industry. Thus, the opportunity to bring the big shift lies here, and it is crucial to address this need urgently.
While electric two-wheeler sales in several tier-2 markets have gained great momentum over the recent months, it is the tier-3 cities that need strong attention and financial support. It is important for the manufacturers to focus on expanding their sales and dealership networks in these areas. By partnering with local distributors and setting up service centers in smaller towns and rural areas, companies can increase accessibility and convenience for customers. This strategic expansion will not only boost sales but also contribute to job creation and economic development in underserved regions.
Moreover, greater incentivization of domestic manufacturing of these vehicles is crucial for the industry’s growth. The government’s PLI scheme has played a significant role in this regard, but more support and encouragement are needed to drive the sector forward. Reports suggest that penetration of EV two-wheelers is set to rise by 10-15%, with sales projected to reach 3-4 million units by FY26, thanks to schemes that push manufacturing such as the PLI scheme. However, certain challenges such as longer funding window for the PLI scheme, etc need to be addressed.
Improving consumer awareness is also crucial for the advancement of the industry. Many Indian consumers and small manufacturers still remain unaware of the government policies and incentives available to them, which in turn hampers the production and sales of EV two-wheelers. Moreover, many consumers are unaware of the benefits of electric two-wheelers and may not even consider them as a viable option. This consumer perception needs to be urgently changed, which could be done through collaborative efforts by manufacturers, policymakers and stakeholders to raise awareness. Promotional campaigns, targeted marketing strategies, and incentives can help raise awareness and drive adoption of electric two-wheelers in India.
The challenges mentioned earlier are not significant barriers but rather minor hurdles that can be easily addressed to drive the growth of the Indian electric two-wheeler market. The future appears bright, with the adoption of electric two-wheelers expected to continue its upward trajectory in the coming years. Market share is projected to exceed 13% by 2026-27, with India setting an ambitious target of achieving an 80% market share for electric two-wheelers by 2030. Given the progress made thus far, this goal seems well within reach, reflecting a vision that the nation is steadily advancing toward.
