Future of Electric Two-Wheeler Industry in India - Will It Sustain?

Mansi Maheshwari Mansi Maheshwari
May 27, 2022 9 min read
Future of Electric Two-Wheeler Industry in India - Will It Sustain?

As we all know, two-wheelers constitute a considerable part of the Indian motor vehicle ecosystem and are an integral mode of transportation in some regions. Though two-wheelers have been around since the early 20th century, it is only a decade old that they have started to make their way into the daily lives of millions of Indians.

The number and types of two-wheelers available in India have expanded to include scooters, motorcycles, mopeds, and motorcycles that are mostly fuel-driven. On the other hand, there is a relatively small but fast-growing segment of electric two-wheelers, also known as e-two-wheelers.

These are gaining popularity and have been making headlines due to the apparent benefits they bring with them. But how long will these e-two-wheeler companies sustain? Well, this must be a question that every potential buyer has in his mind when he or she decides to buy one.

In the recent past, though, India has made it clear that they want nothing less than 7 million EVs on their roads by 2030. This seems like a tall order, and India will have to exert a lot of effort towards making it possible. Let’s check out what Indian Electric Two-Wheeler Industry looks like and is it able to survive;

Pioneer of Electric Two-Wheeler in India
Support by the Government
Growth of Electric Two-Wheeler Companies in India
What Is Propelling the Growth of Electric Two-Wheelers?
What Is Restricting the Growth of the Electric Two-Wheelers?
The Hype Surrounding the Two-Wheeler Industry
Future Trends of the Two-Wheeler Industry
Steps That Should Be Taken to Sustain the Growth of the Two-Wheeler Industry

Pioneer of Electric Two Wheeler in India

The electric two-wheeler industry has been growing steadily over the last few years, but it still remains a niche market. The first electric scooter was introduced in 2013 by a startup called Ather Energy, and since then, there has been no looking back.

The company sold 1,000 units of its Thunderbird in 2016 and manufactured over 3,000 units of this model in 2017. The company also plans to launch an electric motorcycle in the next couple of years and plans to sell around 100,000 units of this model. This is just one of many brands that have begun manufacturing electric two-wheelers in India.

The electric two-wheeler industry is at its nascent stage in India. The Government has recently announced a plan to make all vehicles driven by electricity by 2030.

Support by the Government

The electric two-wheeler industry has been the center of attention for quite some time. The main reason for this is the rising pollution and the need to reduce it. The move toward electric vehicles is a step in the right direction. However, many factors need to be taken into account before making a decision on which vehicle to buy.

It has been announced that the Indian Government will invest $60 billion in electric vehicle production by 2025 as part of their β€œMake in India” campaign. This is expected to boost sales by 50% over the next five years.

The number of electric two-wheelers sold per month has steadily increased since 2013, when they first hit the market, with only 1,000 units being sold that year. Still, this figure has now climbed to over 20,000 units per month, according to recent reports published by SIAM (Society of Indian Automobile Manufacturers).

The Indian Government aggressively pushes the electric vehicle (EV) agenda to reduce pollution and boost green energy. It plans to achieve the target of 100% electric mobility by 2030. The Government has also announced several incentives, such as reduced GST and better infrastructure for EVs, among others.

The industry is still at its nascent stage in India, and the demand for electric two-wheelers is mainly driven by e-commerce companies like Flipkart, Amazon, etc. However, growth in demand for electric vehicles has been slow due to poor infrastructure, lack of awareness, high cost, and customer preference toward conventional bikes over electric bikes.

Growth of Electric Two-Wheeler Companies in India

Electric two-wheelers are gaining momentum in the Indian market. Several companies have entered the electric two-wheeler segment in the last two years. These include Hero Electric, Ather Energy, Zoomcar, Ola Electric and TVS Motor Company.

Some of these companies have already launched their products, and some others are about to launch them soon. This has led to increased competition in the industry which will benefit customers in terms of better products at lower prices. However, there are still some challenges that these companies need to overcome before they become profitable entities.

What Is Propelling the Growth of Electric Two-Wheelers?

Electric two-wheelers are a relatively new concept in India. The idea is not new, though, with countries like China have been using electric scooters and bikes for a few years now. Indian cities have been witnessing a surge in the number of people opting for public transport due to traffic congestion and pollution levels, which has led to the increased usage of electric vehicles.

The need for an alternative method of transportation has gained more importance than ever before. The number of people opting for electric two-wheelers as their primary mode of commute has grown manifold over the past few months, especially after the Delhi government announced its plan to buy 10,000 battery-operated bikes from BSF to be used by its security personnel.

The major factors driving this growth are:

  • Increase in disposable income
  • Government support and subsidies
  • Increasing awareness about pollution and climate change.
Sales of Electric Two-Wheeler in India by Brands
Sales of Electric Two-Wheelers in India by Brands

How Zomato is planning to make 100% Food deliveries on Electric Vehicles by 2030
Zomato one of the largest food delivery startup is planning to make its Food delivery services completely electric by 2030.

What Is Restricting the Growth of the Electric Two-Wheelers?

Electric two-wheelers are gaining popularity in India. The electric two-wheeler industry is anticipated to grow at a healthy pace in India and is expected to become a USD 3 billion market by 2025. However, some factors are restricting the growth of the industry in India:

High Manufacturing Cost

The manufacturing cost of an electric two-wheeler is high compared to conventional bikes due to the use of expensive lithium-ion batteries and other electronic components. The cost of manufacturing an electric scooter or bike is around USD 1,600 while manufacturing a conventional motorbike is around USD 500-600.

Experts believe that if the cost of raw materials used in making electric bikes comes down, then it can help reduce the overall manufacturing cost significantly.

Limited Availability of Charging Infrastructure

There is limited availability of charging stations for electric two-wheelers in India which will restrict their growth in the next few years unless considerable investments are made by manufacturers and government bodies to build charging infrastructure across cities and towns across India.

There were only about 1,000 charging points across India as of December 2018, which means that there is only one charging point per every 100 km, making it difficult for users to charge their batteries while commuting between cities or towns.

Low Battery Life

Another challenge facing this industry is that its batteries do not last long enough before they need charging again; often, they only last 10 kilometres or less before needing recharging again.

The Hype Surrounding the Two-Wheeler Industry

The hype surrounding the industry is more than just a marketing gimmick. The Government has been actively promoting the use of electric vehicles in India. The Government believes that if many commuters adopt these vehicles, it will help reduce pollution. It also hopes that this will lead to economic benefits by reducing fuel imports and improving job creation.

The Government has set up several incentives for such purchases to encourage people to make this switch. For example, buyers get an additional income tax deduction under Section 80EE of the Income Tax Act.

This gives them a deduction of Rs 1 lakh on an electric car and Rs 50,000 on an electric scooter or motorcycle. Thus, if you bought a new two-wheeler that costs over Rs 2 lakhs after March 31st, 2022, you can claim as much as Rs 50,000 as a deduction from your taxable income for each vehicle purchased during the financial year 2021-2022; this is double what you could claim in FY2020-2021.

The electric two-wheeler industry is growing at a fast pace. Many companies are trying to come up with new products and services. The future trend of the electric two-wheeler industry is that it will continue to grow and become more popular in the future.

The following are some of the promising trends that can be expected in the next few years:

Increase in the Number of Electric Bikes

The number of electric bikes and scooters will increase in the coming years as more people are interested in them because they want to save money on fuel, reduce pollution, and many other reasons.

More People Will Use Electric Scooters or Bikes for Commuting Purposes

Commuting is one of the major drivers of why people are using electric scooters instead of cars or public transportation. They do not have to worry about intense traffic jams or finding parking spaces when they commute using an electric bike.

Increasing R&D Investments

The major players across the globe are investing millions of dollars in R&D activities to develop new technologies and improve existing ones. For instance, Shimano Inc., a Japan-based company, has focused on developing new products such as electronic shifting systems, road bikes, and mountain bikes since 1984. It also acquired Cannondale Bicycle Corporation in 1988, which provided it with an opportunity to strengthen its position as a leading player within the biking industry.

Steps That Should Be Taken to Sustain the Growth of the Two-Wheeler Industry

The Indian two-wheeler industry has been expanding at a healthy rate of around 20% year over year. This growth has been supported by increasing urbanization and increasing disposable income. A rising preference for automobile ownership is also driving the demand for two-wheelers. However, this growth may not be sustained in the long run if we do not take certain steps immediately.

The first step would be to improve the infrastructure of roads, highways, and other modes of transportation in India. As a result, this will significantly improve the movement of goods and people across cities and states, thereby creating job opportunities for millions of people.

The second step would be to create an environment conducive to innovation and research & development. This will ensure that new technologies are developed to help reduce pollution levels in our cities and towns.

Thirdly, we need to encourage the use of electric vehicles (EVs) as they can play an important role in reducing pollution levels in our cities and towns, as well as bring down costs associated with transportation systems due to reduced maintenance costs on EVs compared with conventional internal combustion engine vehicles (ICEVs).


How To Start EV Charging Stations Business In India - StartupTalky
EVs can also reduce emissions that contribute to climate change and smog, improving public health and reducing ecological damage. Charging station units specifics.

Conclusion

India needs to focus its attention on developing a strong manufacturing base for electric two-wheelers. If we develop that, then the market will indeed thrive...

The electric two-wheeler industry has a realistic chance for growth in India. The Government needs to foster the market through reduced taxes and incentives for manufacturers and suppliers of electric two-wheelers. This will allow more competition among manufacturers and easier access to parts by consumers. The Government should also focus on minimizing the cost of creating infrastructure that can support electric two-wheeled vehicles (i.e., charging stations, electricity reinforcement, etc.), as it will significantly impact the demand for such vehicles.

The market will quickly pick up, with the launch of new manufacturing facilities accelerating the transition from fossil fuels. One day, soon, we will see the day when switching to an e-bike or a car powered by electricity will be an easy choice for people in India and around the world.

FAQs

How many electric two-wheelers are there in India?

In 2021 there were nearly 1.4 lakh two-wheeler units were sold in India.

Which is the best electric two-wheeler in India?

Ola S1, Bajaj Chetak, TVS iQube, and Okinawa iPraise are some of the leading electric two-wheeler brands in India.

Which is the largest selling electric scooter in India?

Hero Electric is the largest selling scooter brand in India.

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