Industry Report - Electric Two Wheeler Industry
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1. What’s Happening Around The Globe?
Global Electric 2W Market: A Rollercoaster Ride
China Slows Down, The World Feels It:
The global electric 2W market shrank by 18% in 2023, mostly thanks to China’s 25% drop—because when the world's biggest EV market sneezes, everyone else catches a cold. Turns out, supply chain issues from zero-Covid policies still have a longer lifespan than anyone expected.India & ASEAN: The Underdogs Rising:
While China still rules the EV kingdom with 78% of global sales (6 million units in 2023), India grew 40% YoY to 880,000 units, making it the second-largest electric 2W market. ASEAN countries also put up a fight, selling 380,000 units—though China still looks at them like a parent watching their kid ride a bicycle for the first time.India’s EV Boom: Powered by Policy & Incentives:
The FAME II subsidy (which ended in March 2024) gave the sector a major boost, only to be replaced by the Electric Mobility Promotion Scheme (EMPS)—a short-term fix throwing in ₹4.9 billion (~$60M) to keep the momentum alive. Other perks like PLI incentives, GST reductions, and RTO tax rebates have kept the wheels turning.EVs vs ICE: Who Wins the Cost Battle?
Despite electric 2Ws being 30% pricier upfront, subsidies and tax rebates brought them 15% cheaper than ICE counterparts in 2023. Over five years, an EV saves 40% on costs, making it a no-brainer—unless you’re emotionally attached to your petrol bills.ASEAN: The Vietnam Show:
Vietnam leads the ASEAN pack with 250,000 EVs sold in 2023 (9% market share), proving that scooters are the region’s true MVPs. With 68% of models still running on lead-acid batteries, the shift to Li-ion tech is the next big step. Meanwhile, Indonesia is throwing $455M into subsidies, aiming for 800,000 new electric bikes and 200,000 ICE conversions—because why replace when you can upgrade?Beyond Asia: Who’s Even Competing?
China, India, and ASEAN dominate the EV race, while the rest of the world watches from the stands. Combined, other regions account for less than 5% of sales—with Türkiye leading the non-Asian markets, followed by France, the Netherlands, Italy, and Spain.
Electric two-wheeler new registrations and sales by region, 2015-2023 (Fig 1 & Fig 2)
Electric two-wheeler sales share by region, 2015-2023 (Fig 3 & Fig 4)
2. Indian Electric Vehicle Industry
The EV industry in India is shifting gears rapidly, fueled by government policies, growing environmental awareness, and advancements in battery technology. If EVs had a theme song, it would probably be "Highway to the Green Zone."
As the world edges towards sustainable mobility, India is racing ahead like an overenthusiastic auto-rickshaw driver on an empty road. Thanks to a powerful push from the government (think of it as an electric jolt rather than a gentle nudge), the industry is set to zoom forward at an electrifying pace.
India’s carbon-cutting commitment has sparked a wave of initiatives, not just for large-scale EV adoption but even for residential use. The NEMMP and FAME schemes are acting like pit crews in this high-speed race, ensuring a smooth rollout.
The country’s ambitious target—30% of total vehicle sales as EVs by 2030—shows it means business (and not just wishful thinking like that gym membership you never use).
The Indian EV market, valued at around USD 3.21 billion in 2022, is expected to turbocharge its way to USD 113.99 billion by 2029, growing at a jaw-dropping 66.52% CAGR. That’s the kind of growth even stock market traders dream about!
FY 2023 saw over 1.2 million EVs hit the roads, marking a 58% jump from the previous year. This surge has been powered by better battery tech, skyrocketing fuel prices (making petrol pumps look scarier than haunted houses), and a collective realization that maybe we should stop treating the planet like a rental apartment.
States like Maharashtra, Karnataka, Tamil Nadu, and Delhi are stepping on the accelerator with tax breaks, subsidies, and infrastructure support to speed up EV adoption.
In tandem with a rapidly growing charging network, these initiatives are making EVs more accessible across vehicle categories—because let’s face it, an electric revolution without charging stations would be like a cricket match without tea breaks.
So, whether you’re an early adopter or still clutching your petrol keys, one thing is clear: India’s EV future is not just coming—it’s arriving with the speed of a well-placed cover drive!
3. India’s Two-Wheeler Industry: Shifting Gears (Sometimes in Reverse!)
Overview:
The two-wheeler (2W) industry in India has had a bumpy ride over the past decade. Between FY19 and FY24, it saw a negative volume CAGR of 3%, while over the longer term (FY14-24), it managed a modest 2% growth—which is like expecting a superbike but getting a slow-moving scooter instead.
Several roadblocks—including a sluggish macroeconomic climate, lingering COVID-19 impacts, and steep price hikes—have put a speed breaker on growth.
But hold on—India is still a major player in two-wheeler exports! In FY24, OEMs produced 21.5 million units, with 18 million sold domestically and about 3.5 million exported, according to SIAM data. (And let’s be honest, actual domestic sales might be even higher—some OEMs keep their numbers more secretive than grandma’s spice mix.)
India is one of the fastest-growing markets for Electric Two-Wheelers (E2Ws), with these eco-friendly rides making up over 70% of all registered EVs. And why not? They’re perfect for short commutes, delivery services, and avoiding those never-ending fuel price hikes.
With two-wheelers guzzling over 50% of India’s petrol, electrification is not just an option—it’s a necessity.
And the momentum is undeniable. E2W penetration is expected to surpass 80% by 2030. In March 2023 alone, 86,067 E2Ws were registered—proof that people are switching from fuel tanks to battery packs at record speed.
A quick look at the E2W sales graph from December 2021 to March 2023 shows a clear upward trajectory, much like a rocket launch—except, in this case, the fuel is clean, green, and electric.
4. Opportunities & Growth Factors
Low Cost of Ownership: E2Ws offer 20-70% lower Total Cost of Ownership (TCO) than ICE two-wheelers, making them a cost-effective choice amid rising petrol prices.
Growing Last-Mile Deliveries: The surge in e-commerce and doorstep deliveries has increased demand for E2Ws due to their efficiency and lower operating costs.
Ideal for Urban Mobility: E2Ws are well-suited for congested city roads, offering easy manoeuvrability, reduced emissions, and cost savings over cars and public transport.
India’s Green Goals: Aligned with India’s COP26 commitment to reduce carbon emissions, E2Ws play a crucial role in the country’s transition to sustainable mobility.
Sales of Electric Vehicle's
India’s domestic motorcycle volumes: Engine capacity-wise
5. Key Trends Shaping the Industry
Scooterisation
The scooter segment has experienced a remarkable increase in market share over the past decade. In FY10, scooters constituted 16% of the domestic two-wheeler market, which grew to 28% by FY15, and reached 32% in FY24. This upward trajectory can be attributed to several factors:
Ease of Use: Scooters offer a user-friendly experience, making them particularly popular among women, senior citizens, and novice riders.
Practicality: Features such as ample storage space, moderate top speeds enhancing safety, and superior manoeuvrability in congested urban settings have made scooters the preferred choice for many commuters.
Premiumisation
The motorcycle segment is witnessing a shift towards higher-displacement models. The share of executive and premium motorcycles (above 110cc) in overall motorcycle volume has risen to 52% in FY23 from 40% in FY19. This trend is driven by:
Consumer Preferences: Riders are increasingly opting for motorcycles equipped with modern features like push-button starts and digital displays, enhancing the riding experience.
Economic Factors: Improving per capita income, especially in urban and semi-urban markets, enables consumers to invest in premium models.
However, the 125-150cc category has seen sluggish growth over the past 2-3 years, possibly due to higher price points and competition from established brands offering lower-displacement alternatives. Despite modest volume growth, the premiumisation trend is expected to drive two-wheeler OEM revenue up by 13-14% in the current fiscal year.
Electrification
Electrification is emerging as a significant trend within India's two-wheeler industry. The momentum behind electric two-wheelers (e2Ws) has accelerated over the past two years, influenced by:
Supportive Government Policies: Incentives and policies aimed at reducing emissions and promoting clean energy are encouraging the adoption of electric vehicles.
Lower Total Cost of Ownership: Reduced fuel expenses and maintenance requirements make electric two-wheelers increasingly attractive to consumers.
Market Growth: In FY24, electric two-wheeler sales reached a record 944,000 units, marking a 30% year-on-year growth.
Leading Manufacturers: Companies like Ola Electric have emerged as market leaders, with Ola selling over 326,000 units in FY24, capturing a 35% market share.
6. Competitors in the Electric Two Wheeler Industry
1. Ola Electric
Ola Electric has quickly established itself as a dominant player in the E2W segment with its S1 series of electric scooters. Leveraging its strong brand presence and aggressive pricing strategy, Ola Electric has captured significant market share. The company has invested heavily in battery technology and manufacturing capabilities, including the development of a massive ‘Futurefactory’ in India.
Key Strengths:
Competitive Pricing: Ola offers a range of models priced between ₹79,999 and ₹1,69,999, appealing to a broad spectrum of consumers
Strong Brand Recognition: Backed by significant investments and a robust marketing strategy, Ola has established itself as a household name in the Indian EV market.
Challenges:
After-sales Service Concerns: Rapid expansion has led to issues in service quality, with the company incurring a one-time cost of ₹1.1 billion to address regulatory scrutiny at its workshops
Intense Competition: Facing stiff competition from legacy automakers like Bajaj Auto and TVS Motor, Ola Electric has had to offer heavy discounts, contributing to a quarterly loss of ₹5.64 billion in the October-December period of 2024
2. Ather Energy
Ather Energy is known for its premium electric scooters, the Ather 450X and Ather 450S, which emphasize performance, technology, and smart connectivity. Ather has built a strong brand reputation for quality and innovation, supported by a growing network of fast-charging infrastructure.
Key Strengths:
Innovative Technology: Ather is known for its advanced features, including over-the-air updates and a robust charging infrastructure.
Strong Brand Presence: The company has cultivated a loyal customer base through quality products and transparent practices.
Financial Backing: Backed by significant investors, including Hero MotoCorp, providing financial stability and growth opportunities.
Challenges:
Scaling Production: Meeting the growing demand while maintaining quality poses a significant challenge.
Financial Losses: Despite growth, the company reported widening losses, reaching ₹10.6 billion in fiscal 2024.
3. Hero Electric
Hero Electric, a subsidiary of the Hero Group, is one of the pioneers in the Indian E2W space. It offers a wide range of affordable electric scooters, catering to both urban and rural markets.
Key Strengths:
Extensive Dealer Network: A widespread presence across the country facilitates better reach and service.
Affordability: Focuses on cost-effective models, making EVs accessible to a broader audience.
Established Brand Trust: Long-standing reputation in the automotive industry instills confidence among consumers.
Challenges:
Technological Advancements: Needs to continually innovate to keep up with competitors offering advanced features.
Brand Perception: Shifting consumer perception from traditional to electric models requires ongoing effort.
4. TVS Motor Company
TVS entered the E2W segment with the iQube electric scooter, focusing on reliability, performance, and practicality. The company benefits from its strong manufacturing expertise and established dealership network.
Key Strengths:
Established Brand Trust: Long-standing reputation in the automotive industry instills confidence among consumers.
Research and Development: Investments in R&D have led to the development of reliable and efficient electric models.
Diverse Product Portfolio: Offers a range of models catering to different customer preferences.
Challenges:
Market Penetration: Expanding EV offerings to match the scale of their traditional vehicles.
Infrastructure Development: Enhancing charging infrastructure to support EV adoption.
5. Bajaj Auto (Chetak Electric)
Bajaj Auto revived its iconic Chetak brand as an electric scooter. The Chetak Electric focuses on premium design, durability, and robust build quality, targeting urban commuters.
Key Strengths:
Brand Heritage: The Chetak name carries a legacy that appeals to a wide customer base.
Build Quality: Known for durable and high-quality vehicles.
Financial Stability: A strong financial position allows for sustained investments in EV technology.
Challenges:
Limited Model Range: Currently offers a limited selection of electric models.
Distribution Network: Expanding the availability of EVs across all regions.
6. Revolt Motors
Revolt Motors specializes in electric motorcycles and is known for the Revolt RV400, India’s first AI-enabled electric bike. The company has gained traction among young riders looking for a performance-oriented electric bike.
Key Strengths:
Innovative Business Model: Introduced subscription-based ownership plans.
Tech-Savvy Features: Incorporates AI and connected features in their bikes.
First-Mover Advantage: Pioneered electric motorcycles in the Indian market.
Challenges:
Production Scalability: Meeting demand and scaling production efficiently.
Service Network: Building a robust after-sales service infrastructure.
7. Ampere Vehicles (Greaves Electric Mobility)
Ampere Vehicles, a subsidiary of Greaves Cotton, targets the budget-friendly segment with its electric scooters. The company focuses on affordability, making EVs accessible to a larger audience.
Key Strengths:
Affordability: Provides cost-effective solutions for urban mobility.
Strategic Partnerships: Collaborations to enhance technology and market reach.
Focus on Sustainability: Emphasis on eco-friendly manufacturing processes.
Challenges:
Brand Recognition: Competing with more established brands in the EV sector.
Product Range: Expanding their lineup to cater to diverse consumer needs.
8. Okinawa Autotech
Okinawa Autotech is another strong player in the E2W industry, offering a range of electric scooters across various price segments. It competes aggressively in both urban and rural markets.
Key Strengths:
Diverse Product Lineup: Caters to various segments, from low-speed to high-speed scooters.
Market Penetration: Strong presence in both urban and semi-urban areas.
Manufacturing Capacity: Operates multiple plants with significant production capabilities.
Challenges:
Quality Control: Ensuring consistent product quality amidst rapid expansion.
Brand Loyalty: Building a loyal customer base in a competitive market.
9. Ultraviolette Automotive
Ultraviolette Automotive is focused on high-performance electric motorcycles, with its flagship model, the F77, targeting the premium sports bike segment.
Key Strengths:
Performance-Oriented: Targets enthusiasts with high-speed and long-range capabilities.
Innovative Design: Emphasis on futuristic aesthetics and advanced technology.
Challenges:
Niche Market: Catering to a specific segment may limit mass adoption.
Production Capacity: Scaling up manufacturing to meet potential demand.
10. International Players (Entering Indian & Global Markets)
Global companies such as Honda, Yamaha, and Suzuki are also developing electric two-wheelers and eyeing expansion in India and other key markets. These legacy brands bring years of expertise, advanced technology, and strong dealer networks.
7. Price Dynamics and Market Competition
When comparing electric two-wheelers (e-scooters) to internal combustion engine (ICE) petrol scooters in India, several factors come into play, including purchase price, running costs, and maintenance expenses.
Purchase Price Comparison:
Electric scooters generally have a higher upfront cost compared to their petrol counterparts. Below is a comparison of the ex-showroom prices for the Ather 450X (electric) and two popular petrol scooters:
Running and Maintenance Costs:
Despite the higher initial investment, electric scooters often prove more economical over time due to lower fuel and maintenance costs. Here's a comparison based on annual expenses:
Key Takeaways:
Initial Investment: Electric scooters have a higher purchase price than petrol scooters.
Operational Savings: Lower fuel and maintenance costs make electric scooters more cost-effective over time.
Break-Even Point: The total cost of ownership for electric scooters becomes favourable over petrol scooters within a few years, depending on usage patterns.
8. Government Incentives and Subsidy Dynamics
Government Initiatives
FAME-II Scheme: The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme offers financial incentives to both manufacturers and consumers, accelerating the adoption of electric vehicles.
Production Linked Incentive (PLI) Scheme: With an approved outlay of ₹25,938 crore, the PLI scheme incentivizes domestic manufacturing of electric vehicles and components. As of six months ago, investments under this scheme reached ₹17,896 crore, with incremental sales surpassing ₹3,370 crore.
PM E-DRIVE Program: Approved five months ago, the PM E-DRIVE program allocates ₹109 billion to support various electric vehicles, including two-wheelers, three-wheelers, ambulances, and trucks. This initiative aims to boost EV adoption, enhance charging infrastructure, and foster technological advancements, targeting an increase in EV car sales from under 2% to 30% by 2030.
Investments in the E2W Sector
Ola Electric: India's leading e-scooter manufacturer, Ola Electric, launched the largest IPO in India for the year, worth $655 million in new shares plus $77 million from existing investors. Since beginning delivery in 2021, Ola Electric has rapidly become India's market leader, capturing over a third of EV scooter sales.
Ather Energy: The Bengaluru-based electric scooter manufacturer filed for an initial public offering (IPO) worth ₹45 billion ($536.2 million) five months ago, with plans to establish a new manufacturing facility in Maharashtra and expand its market presence.
Ultraviolette Automotive: This Bengaluru-based electric two-wheeler manufacturer secured ₹130 crore (approximately $15.3 million) in a funding round two months ago, led by Zoho Corporation, to enhance its production capabilities and technological development.
Simple Energy: In 2022, Simple Energy announced a partnership with U.S.-based C4V for cell manufacturing in India, involving an investment of $150 million to strengthen its supply chain and production capacity.
British International Investment (BII): BII has committed $33.5 million to India's EV ecosystem, investing in companies like Everest Fleet, TI Clean Mobility, and Vecmocon to drive sustainable growth and combat air pollution.
9. Conclusion & Outlook
India's E2W industry is in the midst of a vibrant transformation, driven by technological innovation, strong government support, and a growing commitment to environmental sustainability. Here’s a snapshot of the current landscape:
Robust Government Initiatives:
Programs like the FAME-II scheme and the PLI scheme have been pivotal in boosting domestic production and consumer adoption. These initiatives not only support manufacturing but also enhance the charging infrastructure and overall ecosystem.Technological Advancements:
Cutting-edge features such as over-the-air updates, AI-driven safety systems, and improved battery technology are setting new benchmarks. Leading companies are continuously investing in R&D to improve performance and connectivity, making electric two-wheelers increasingly appealing.Market Dynamics:
The industry benefits from a maturing charging infrastructure and evolving supply chain networks. While supply chain challenges and after-sales service issues persist, the overall sentiment remains positive due to continuous improvements and strategic investments.Competitive Landscape:
The market is highly competitive, with traditional ICE manufacturers and new EV entrants vying for dominance. Despite this, the push towards cleaner mobility is fostering an environment of relentless innovation and strategic collaboration.
Thank you for reading till the end! We hope you enjoyed this report.
Researched By- Naresh, Mayank and Vaibhav
All information is sourced from the company's annual reports, GoIndiastocks.in, Screener. in, Industry Reports and Economy Outlook Reports, IBEF, IEA.org etc.
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