India Electric Scooter And Motorcycles: Market Snapshot
The market for electric scooters and motorcycles in India was valued at USD 893 million in 2022; from 2022 to 2030, it is anticipated to increase at a compound annual growth rate of 27.30%, reaching USD 6,161 million. Due to the increased demand for zero-emission vehicles, favorable government laws, the growing desire for energy-efficient commuting, and rising fuel prices, two-wheeler manufacturers have been forced to look into alternate power sources for their two-wheeled models.
The need for affordable two-wheelers is also fueled by the rising costs of ICE vehicles brought on by the implementation of BS 6 and the cheap maintenance costs of EVs. Additionally, the federal, State, and municipal governments have recently implemented several programs to control automobile emissions, including purchase refunds, tax exemptions, and financial incentives for EV buyers. The government’s increased emphasis on reducing pollution levels in the nation portends regulatory support for electric two-wheelers.
In India, scooters and motorcycles are responsible for 30% of the country’s particles and 20% of its CO2 emissions. Recent government regulations have considered the requirement to electrify the fleet of two-wheelers. To address this, the national government has put forth a plan in 2019 to have all two-wheelers up to 150 cc sold exclusively as electric vehicles by March 2025.
The two- and three-wheeler segments would be significantly responsible for adopting electric bikes in India over the next several years. The market value in India will be boosted throughout the projection period, particularly by the anticipated growth in demand for high-speed electric scooters and motorbikes and the increase in retail prices.
According to the FAME-II scheme, the government offers INR 10,000 per kWh battery for a two-wheeler. This relates the demand incentive to the capacity of the battery. Additionally, the Ministry of Heavy Industries and Public Enterprises reports that the demand for electric two-wheelers has increased to nearly 5,000 units per week from 700 units per week before modifying the FAME-II plan in June 2021.
When combined with the FAME-II demand incentives, the decreased battery cost is expected to reduce the cost of ownership significantly and, as a result, the viability of EVs.
The Demand Is Highest For Vehicles Using Lithium-Ion Batteries
50% to 60% of the overall price of EVs goes towards batteries. In addition, motorcycle Li-ion batteries costs have dropped significantly over the past ten years at about 30% yearly. Over the coming years, the decline will continue at roughly 10% annually, making these cars more affordable for the general public. Furthermore, the FAME-II scheme’s incentives would significantly increase the viability of electric cars for regular people.
Sales Of Electric Scooters Are Anticipated To Rise Quickly In The Next Years
In the upcoming years, electric scooters will rule the market, particularly those with a medium top speed (40–80 km/h). Sales of electric scooters in this speed range are being boosted in India by their wide availability, low cost, and feasibility as an alternative to traditional gasoline-powered mopeds. The market will increase over the forecast period as motorcycle manufacturers in India are anticipated to introduce several electric models in the upcoming years.
The Two-Wheelers Powered By 48V Batteries Generated The Most Revenue
With a market share of more than 80% in 2022, 48V batteries are this industry’s most widely utilized power source. Due to their affordability, usability, and safety, scooters with 48V batteries will continue to dominate the market during the projection period.
Moreover, the percentage of electric two-wheelers using 60V batteries is anticipated to increase over the next several years due to the growing desire for faster speeds and longer driving distances.
Technology For Removable Batteries Will Make Two-Wheeler Electrification Possible
Electric scooters with changeable batteries now account for a considerable portion of the market. Removable batteries have become a remedy for the lack of a charging infrastructure and client range anxiety. People may easily remove the battery from their automobile, transport it, and plug it into a standard residential electrical outlet. Therefore, it is anticipated that the technology will significantly affect the market and double the rate of car electrification in the nation.
The B2B Application Of Last-Mile Logistics Is Anticipated To Grow More Quickly
More than 2 million petrol-powered scooters and motorbikes are used for courier services, operating for several hours each day. Additionally, there is a greater need for two-wheeler fleets for delivery due to the numerous food and beverage store openings in the significant tier-1 and tier-2 cities. The major OEMs have used this chance to persuade last-mile delivery companies to swap their outdated vehicle models for more affordable, low-maintenance, and environmentally friendly alternatives.
The EV Industry Is Being Supported By Government Subsidies And Regulatory Policies
By providing subsidies for the buying electric bikes, the Indian government is helping the industry. These incentives have increased the consumer viability of battery-powered scooters and motorbikes. Some of the supported measures are tax exemptions, purchase rebates, and financial incentives for EV consumers.
Additionally, an action plan to promote electric two- and three-wheelers has been developed by the Ministry of Road Transport and Highways (MoRTH) as part of the National Mission for Transformative Mobility and Battery Storage. The government committee has also proposed a ban on all ICE variations in India, beginning in 2025 for two-wheelers and in 2023 for three-wheelers. Additionally, it is anticipated that sales of these scooters and motorcycles will increase during the projected period due to the increasingly strict emission standards.
India Electric Scooter And Motorcycles: Governmental Goal For 2025
The government has nearly completely underestimated the economic impact of a new green strategy, even though 15 of the 20 most polluted cities in the world are in India. As a result, the environmental risk to the population’s health is becoming more serious.
The government is now putting initial cautious measures under the form of a “Think Tank,” presided over by Prime Minister Narendra Modi, to reduce CO2 emissions and the fuel import cost. Given that the scooter industry accounts for nearly 60% of the nation’s fuel usage, the committee of experts (including local company representatives) believes rapid electrification is the best option.
The outcomes of this Think Tank were surprisingly constrained to replace all new two-wheelers with 100% electric engines by 2025 (which represents over 90% of the current market). Aside from a few test and fleet sales, there are only a few sales.
It has yet to be revealed if there is a plan to significantly upgrade the country’s public and private infrastructure for convenience or to remove some of the existing 100 million outdated two-wheelers from the roads.
Given that nearly 20 million 0-150cc scooters are produced annually, it will be costly for local manufacturers to convert the existing production to 100% in 5 years. We can see from their balance sheets that Bajaj Bikes and Hero Bikes are among the most lucrative motorbike companies in the world. The government’s goal will necessitate significant investments, and the State will participate through various subsidies.
Naturally, the manufacturers’ initial response was to oppose the target; nevertheless, they are currently in the bargaining stage and trying to maximize the amount of money the government will receive.
India Electric Scooter And Motorcycles: Impact On Consumer
No one ever considers that the manufacturing costs of electric vehicles (two, three, four, or even 12 wheels!) are significantly greater than those of corresponding ICE vehicles, affecting the final consumer’s key on-hand price.
A scooter costs half as much in India as it does in Europe. When a potential buyer of a two-wheeler is looking for a new bike in January 2025, the issue won’t be the ONLY electric offer (which by itself still has many problems to be resolved, such as battery durability, km coverage, and availability of charging stations), but rather the cost of the vehicles on the market, which should be 75–125% higher than the price in January 2020.
One could argue that large-scale production typically results in significant cost savings. However, we can see that substantial improvements and expenditures are being made for the sector as it moves from BS-IV to BS-VI standards. Lithium imports drive up battery costs and account for more than 30% of total production costs, a requirement for EVs.
