Electric 2-wheeler growth is seeing downfall, but big scope in future
The E-2Ws constitute 95% of the total electric vehicles on road in India. At present, there are more than 5 lac electric two-wheelers and few thousand electric cars on Indian roads.
Electric 2-wheelers is one of the few industrial segments where India is still at the initial stage and has good scope to grow. Being pollution-free and cost-effective compared to petrol two-wheelers, E2ws are poised to lead the EV transition in India. The E-2Ws constitute 95 percent of the total Electric Vehicles on road in India.
In the last few years, India has shown considerable progress in the electric two-wheeler (E2W) space with serious players entering the market such as TVs, Bajaj, and Hero. From FY2016 till FY2020, the E2W market in India has grown by a CAGR of 62%. Also, more than US$600 million of investments have been raised by various E2W startup companies in the last 2-3 years.
At present, there are more than 5 lac electric two-wheelers and few thousand electric cars on Indian roads. The industry volumes have been fluctuating, mostly depending on the incentives offered by the government. Many serious players (Hero Eco, Ather, Electrotherm, Avon, Lohia, Ampere, etc) are continuing with the mission and trying to enforce the positive change under the banner of SMEV.
The FY2020 sales of electric two-wheelers stood at 152,000 units including non-registered E2Ws supporting the government’s dream of 1 million high-speed E-2W on the road by March 2022. But, this year, the COVID-19 global pandemic situation has led to complete supply chain disruption in the EV space and brought an extended halt to manufacturing in India for three months.
Electric two-wheelers with a maximum speed of less than 25 km/h held the largest share in the Indian electric scooter and motorcycle market, owing to no license and number plate registration requirement for these vehicles. Electric 2 wheelers above 40 km/ hr only get registered.
According to the Society of Manufacturers of Electric Vehicles (SMEV) sales of electric two-wheelers declined by 5.4% year-on-year to 25,735 units in 2020 as against 27,224 units sold in the previous calendar year in India. This fall in numbers is due to the covid-led economic slowdown.
Electric vehicle companies are highly dependent on Chinese imports for assembling EVs in the country. The lockdown in China, especially in Wuhan, which is ground zero for COVID-19, also affected this industry severely.
India is the third-largest carbon-emitting country in the world, accounting for around 6% of the global CO2 emissions from fuel combustion. The government thus is rising its focus to curb pollution levels in the country and had made promises for a positive regulatory push for electric two-wheelers, thus helping the Indian electric scooter and motorcycle market grow.
The central and state government in recent years has taken many initiatives such as the announcement to support battery manufacturing in the country with an outlay of INR 18,000 crores and allowing the selling of E2W without battery, entry of established players in the market, increase in citizens’ interest in green vehicles, start-ups foraying into the industry with innovative solutions like financing, last-mile delivery, charging, etc. to boost E2w growth in India.
According to SMEV, India has a great opportunity to grow in EVs due to reducing the Carbon footprint, dependence on Crude oil imports, creating jobs, and building a new Technology knowledge hub in India.