India’s fast-growing electric two-wheeler market

Fast growing Indian electric two-wheeler market

India’s electric two-wheeler market continues to heat up.

India is undoubtedly one of the fastest growing economies today and one of the world’s largest markets for the production and consumption of two-wheeler electric vehicles.

In India, unique infrastructure planning and long-term travel habits in the urbanization process have made two-wheeler travel the best choice for ordinary people.

In addition, the Indian government is making efforts to lay out the development of the electric vehicle industry, and the original two-wheeled travel market has spawned huge growth space under electrification reform. You can also check the top 10 electric bike manufacturers in India and the top 10 bicycle manufacturers in India for your reference.

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    Accelerated growth in the electric two-wheeler market

    India’s electric two-wheeler market grew rapidly in 2023 with record sales of 857,279 units, up 33.5% from 2022.

    The FAME II subsidy program launched by the Indian government has played a crucial role in driving market growth.

    FAME II provides a subsidy of approximately $120 for certified electric two-wheelers, and after the subsidy, the price of electric two-wheelers is close to being cut from the previous price.

    Strong subsidies not only stimulate rising consumer demand, but also allow local industry in India to explore market opportunities for manufacturers, and the number of manufacturers has grown.

    The number of manufacturers has grown, driving innovation and development in the local electric two-wheeler industry.

    Sales of electric two-wheelers in India 2022-2024
    Sales of electric two-wheelers in India 2022-2024

    As the electric two-wheeler industry continues to grow and the market matures, the government has begun to cut back on subsidies.

    In May last year, the Indian government began cutting subsidies for electric two-wheelers, reducing the maximum incentive rate of 40% for electric two-wheelers to 15%, and decided to reduce demand incentives from Rs. 15,000 per kilowatt hour (kWh) to Rs. 10,000 per kWh, which is a challenge for the price-sensitive market.

    Loss of subsidies after the Indian two-wheeler market was directly affected by June last year.

    India’s electric two-wheeler sales plummeted 50% to 46,105 units, followed by a gradual rebound in market sales, which shows that India’s electric two-wheeler market has been more mature.

    The market in January-February this year, sales volume is to maintain a high level.

    Fast growing Indian electric two wheeler market 1

    Sales data from head producers

    The maturity of the market has been accompanied by increased competition, with six major players standing out – Ola Electric, TVS Motor Co, Ather Energy, Bajaj Auto, Hero Electric and Greaves Electric. Ola maintains its market leadership position with more than 25% of the segment.

    Ola sold a record 30,000 units in December, bringing its annual sales to 228,700 units, up 110.4% from last year.

    In second and third place, TVS sold 183,543 units (+210.2%) and Ather sold 119,318 units (+116.2%), followed by Bajaj Auto (+202.9%), Hero Electric (-53.4%), Ampere (-29.6%) and Okinawa (-71.0%).

    Blectric Two Wheoler Sales FY 23 24

    In the motorcycle segment, the market sold 17.5 million units last year, an increase of 8.5% over the previous year and the best sales level in the last four years. Who are the top 10 electric bike manufacturers in Southeast Asia?

    Hero’s domestic sales stood at 5.3 million units in 2023 (up 6.4%), second-placed Honda Motor sold 4 million units (-4.0%), third-placed TVS Motor saw a significant increase in sales with 3 million units (+21.6%), and Bajaj Auto’s sales were also up from 2022 at 2.05 million units, an increase of 22.0%.

    Inventory high, manufacturers cut prices to clear

    The Indian market has also been affected by the high watermark inventory globally, and in an effort to clear the inventory of products, major manufacturers have started to reduce prices this year.

    In February Ola Electric reduced the prices of its S1 Pro, S1 Air and S1X+ models by Rs 25,000, and there was a noticeable rise in the number of purchases, while Ather Energy also reduced the price of its 450S model by Rs 20,000.

    Industry sources said that the electric two-wheeler makers will continue to reduce prices to accelerate inventory clearance and capture market share.

    Fast growing Indian electric two wheeler market 2

    Penetration in second-tier cities and rural areas

    Manufacturers(electric bike manufacturer) also said there has been an increase in the adoption of electric two-wheeler products in tier II cities and rural areas.

    An industry source said there has been an increase in the penetration of electric two-wheelers in states such as

    West Bengal, Jharkhand, Bihar, Madhya Pradesh and Uttar Pradesh.

    Accelerating product penetration, manufacturers are also setting up service centers, dealerships and experience centers in these areas.

    “The rural market is slowly picking up and tier 2 cities like Karnataka, Delhi and Telangana are doing very well for us… We will set up more dealerships in tier 2 cities. “

    Ola Electric’s Khandelwal also said, “Their numbers are relatively low, but adoption is really rising steadily and we are even seeing it in Tier IV cities.”

    Fast growing Indian electric two wheeler market 3

    Subsidy policy changes

    Following the conclusion of the FAME II subsidy program, the government has launched a short-term program, the Electric Mobility Promotion Scheme 2024 (EMPS).

    The subsidy will be available for a period of four months, from April 1 to July 31, 2024, under the EMPS 2024 program, the government will provide subsidies for electric vehicles.

    Under EMPS 2024, the government has allocated Rs 5 billion for electric two-wheelers and three-wheelers. Of this, about Rs 333.39 crore will be spent on subsidizing the sale of up to 333,387 vehicles.

    Fast growing Indian electric two wheeler market 5

    The subsidy for electric two-wheelers will be Rs 5,000 per kWh of battery capacity, capped at 15% of the vehicle’s ex-showroom price. Who are the top 10 two-wheeler battery companies in the world?

    Compared to the FAME II scheme, the maximum cap remains the same but the subsidy per kWh is halved. There is also an additional cap of Rs 10,000 per EV under EMPS.

    The criteria for inclusion of EV manufacturers in EMPS 2024 must meet the following requirements:

    1. Electric two-wheelers must be manufactured in India.
    2. The EV manufacturer must have local manufacturing and assembly facilities for components such as DC-DC converters, batteries, motors, instrument consoles, etc.
    3. The vehicle warranty must be at least 3 years or 20,000 km, whichever comes first.
      The new EMPS subsidy is currently helping to reduce the cost of EVs, but it is not a long-term solution. Subsequently, if no other measures are taken, the price of EVs could rise significantly, and will have a big impact on companies such as Ather Energy, Ola Electric, Simple, and River, which are highly dependent on subsidies.

    Fast growing Indian electric two wheeler market 4

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    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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