The electric two-wheeler market in India has experienced significant growth in recent years, emerging as a key driver of the country’s EV revolution. These agile and innovative vehicles now account for about 55% of all EV sales, outpacing the growth of electric three-wheelers and four-wheelers. According to recent data, around 0.94 million electric two-wheelers were sold in FY24, a growth of 30% over the previous year. This surge underlines the growing popularity of these eco-friendly mobility solutions.
The key factors driving this growth include increased environmental awareness, rising consumer preferences and increasing urban congestion. Additionally, government initiatives such as FAME-II and Electric Mobility Promotion Scheme (EMPS) have played a significant role in driving this trend. These visionary policies have promoted awareness and encouraged adoption through incentives such as tax benefits and subsidies, thereby contributing significantly to the impressive performance of the sector.
The electric two-wheeler market is booming, with many companies offering a diverse range of scooters and motorcycles to suit different consumer segments. This rapid growth has led to an increase in the number of new startups in the industry, while established players are pushing the boundaries of innovation to maintain a competitive edge. Key advancements focus on battery technology, extended vehicle ranges and advanced features, designed to provide consumers with affordable and efficient options.
Additionally, significant investments in the sector are enabling companies to expand operations, expand product portfolios and explore cutting-edge technologies. Collaboration between vehicle manufacturers and technology companies is accelerating the development of the necessary charging infrastructure, which is critical to the continued expansion of the sector. These dynamic developments are propelling the industry forward, setting the stage for an exciting future in the electric two-wheeler sector.
Having reached this remarkable milestone, it is important that we strategically plan the journey ahead. A critical issue that demands immediate attention is the lack of EV charging infrastructure, especially in tier-2 and tier-3 cities. The lack of easily accessible charging stations is hindering consumers in these cities from switching from conventional petrol-powered two-wheelers to electric vehicles. With their significant population density and widespread use of two-wheelers, these cities hold immense potential to drive the next wave of growth in the electric two-wheeler industry. Thus, the opportunity to make a big difference is right here, and it is important to address this need urgently.
While sales of electric two-wheelers have seen a significant rise in many tier-2 markets in recent months, tier-3 cities need more attention and financial support. It is important for manufacturers to focus on expanding their sales and dealership networks in these regions. 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 growth in deprived areas.
Furthermore, giving greater encouragement to domestic manufacturing of these vehicles is important for the growth of the industry. The PLI scheme of the government has played an important role in this regard, but more support and encouragement is needed to take this sector forward. Reports suggest that penetration of EV two-wheelers is set to grow by 10-15%, with sales estimated to reach 3-4 million units by FY26, thanks to schemes to boost manufacturing like the PLI scheme. However, some challenges such as long funding window for the PLI scheme etc. need to be addressed.
Improving consumer awareness is also important for the advancement of the industry. Many Indian consumers and small manufacturers are still unaware of the government policies and incentives available to them, resulting in hindrances in the production and sales of EV two-wheelers. Furthermore, many consumers are unaware of the benefits of electric two-wheelers and may not even consider them a viable option. This consumer perception needs to be changed urgently, which can be done through collaborative efforts of manufacturers, policy makers and stakeholders to increase awareness. Promotional campaigns, targeted marketing strategies and incentives can help increase awareness and adoption of electric two-wheelers in India.
The challenges mentioned earlier are not significant hurdles but rather minor hurdles that can be easily addressed to further drive the growth of the Indian electric two-wheeler market. The future looks bright, with the adoption of electric two-wheelers expected to continue its progress in the coming years. The market share is estimated to exceed 13% by 2026-27, with India setting an ambitious target of achieving 80% market share for electric two-wheelers by 2030. Given the progress made so far, this goal seems within reach, reflecting the vision towards which the nation is steadily moving forward.
