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Two-wheeler electric vehicle penetration will be at 80 per cent with E2W sales volume in India reaching 22 million by 2030, according to a report by Redseer Strategy Consultants.
India is the world’s largest two-wheeler (2W) market, with an estimated 375–400 million two-wheelers on the road. As of CY2022, India’s overall EV penetration, including 2W, is 3 per cent while the other developed countries that are 4W-dominated markets, such as the USA and China, have 63 per cent and 56 per cent penetration, respectively, according to the report.
One of the critical drivers of growth is the increase in the players in the E2W space, such as Ather, Ola, Hero Electric, Bajaj, TVS, Okinawa, PUREV, and Revolt. “As a result, consumers have more options, pushing better adoption across price points and improving trust among the masses. E2W sales across India are on the rise, including in tier-3 and tier-4 cities.”
On the manufacturing end, simple and easy-to-assemble products led to the foray of several players in the E2W space. “On the consumer end, features, running costs, and price constitute the top three consideration factors for buying an electric vehicle, followed by environmental concern and performance. Despite the purchase cost of E2W being higher, the running costs compared to their internal combustion engine (ICE) counterparts are lower in the case of E2W,” said Aditya Agrawal, partner at Redseer Strategy Consultants.
He added that based on their research, while the E2W total cost of ownership is a bit lower for sporadic users, daily commuters and heavy users save substantially over the life of the vehicle, making E2Ws the right choice for players such as food aggregators and last-mile delivery partners, for whom the total cost of ownership can be lower by over 50 per cent compared to an ICE vehicle.
Challenges
Underpenetrated charging infrastructure and longer charging times remain the biggest challenges for existing users and the most significant deterrents for those on the fence. “A robust charging infrastructure will be essential for long journeys as adoption increases. In addition, customers using E2W for all use cases would, in general, require fast charging stations. As a result, charging infrastructure companies will become critical drivers of adoption,” Agrawal added.
Though the electrification of mobility in India is still at a nascent stage, there is massive headroom for growth. Going forward, the report claims, consumers and regulations will reward players with technological and manufacturing sophistication, leading to a more consolidated market.
The report suggests that schemes such as FAME and PLI should continue for the next few years until E2W becomes mainstream, as there have been reduced E2W sales in geographies where State subsidies were rolled back.” Additionally, it added that the E2W ecosystem must work on the 4As to achieve more than 80 per cent electrification of the country by 2030. These 4As are adaptability, awareness, availability, and affordability.
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