Electric two-wheeler sales in India will grow to around 22 million units by 2030 from the current 8.46 lakh, indicating greater adoption of EVs in the country.
“With the demand for affordable transportation and the focus on reducing carbon emissions, electric vehicles will play a vital role in India's step towards a sustainable future,” the latest report by business consulting firm Redseer Strategy Consultants, which was released on February 1, said.
According to the report, the electric two-wheeler market is expected to be over 80 percent of the overall two-wheeler market by 2030, which is at around 3-4 percent now.
One of the critical drivers of growth is the rise of numerous brands in the space, such as Ather, Ola, Hero Electric, Bajaj, TVS, Okinawa, PUREV, and Revolt. Consumers have more options, pushing better adoption across price points and improving trust among the masses.
“Although the purchasing cost of EV two-wheeler is slightly higher, they win when it comes to running costs compared to their Internal Combustion Engine (ICE) counterparts," said Aditya Agrawal, partner at Redseer Strategy Consultants.
On the manufacturing side, simple and easy-to-assemble products encouraged several players to enter the EV two-wheeler space, the report noted.
The assembly process was simpler with fewer sub-components. As a result, first-time EV makers such as Ampere and Okinawa were able to introduce EV two-wheelers in the Indian market, an executive with an EV startup told Moneycontrol on condition of anonymity.
“On the other hand, the nascency of electric two-wheeler technology doesn't give a significant advantage for 2W majors such as Honda, Bajaj, Hero, and TVS except in distribution,” the executive said.
The Redseer report said with time, the cost of ownership of EVs would be halved.
“While the EV two-wheeler total cost of ownership for a sporadic user is only a little bit lesser, the daily commuter 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 percent compared to an ICE vehicle," Agrawal said.
The report also said the government was the fundamental enabler of early EV adoption with its Faster Adoption and Manufacturing of Electric Vehicles (FAME) and product-linked incentive (PLI) schemes.
“These schemes should continue for the next few years until EV two-wheelers become mainstream, as there have been reduced E2W sales in geographies where state subsidies were rolled back,” the report said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
