Electric two-wheeler market to cross 2 million units by 2025: CXO Survey
As per JMK Research & Analytics “E2W CXO Survey”, most industry experts feel that the electric two-wheeler (E2W) market size is likely to cross 20 lakh units in the next 5 years in India. 60% of the survey respondents also predicted that the expected share of E2Ws in total two-wheeler sales in the next 5 years could vary from 6% to 15%. The current share of E2W in total two-wheeler sales in FY2020 was about 0.7%.
As per the survey findings, the market for high-speed E2Ws is predicted to grow by 5 times Vs. 3-fold growth for low-speed E2Ws in next five years. According to FAME II guidelines, only those E2Ws with speed higher than 40 kmph are eligible for incentives, which is one of the imperative reasons for superior growth prospects for high-speed E2Ws. Rising consumer awareness, strong government push, and falling battery prices would favour robust growth outlook for E2W market. More than 50% of survey respondents feel that the battery prices are expected to be below $100/ kWh before 2024, which is the key factor driving EV market growth. Battery constitutes about 50% cost of an E2W and this price is seen as the inflection point around which EVs would reach price parity with the Internal Combustion Engine (ICE) vehicles.
E2W market size in next five years
Source: JMK Research “E2W CXO Survey”
Despite the fact that there is a sudden disruption in the EV space this year because of COVID-19 pandemic, 50% of the respondents still forsee 2-3 times growth in their business next year.
Even though the future of the E2W industry looks optimistic, there are a few roadblocks on its path to success. High upfront costs of E2W and government incentives linked to E2W components localization are the two main challenges for the E2W market in India. Import dependency for battery and inadequate charging infrastructure are other pressing issues in the market.
Key challenges faced electric two-wheeler industry
Source: JMK Research “E2W CXO Survey”
From the survey, it could also be inferred that in order to induce stronger stimulus to further charge the market, government subsidy is highly crucial for the next 5 years. Respondents have also suggested that direct subsidies should be provided for local manufacturing of components and consumer awareness programs can be promoted by the government. To ensure compete safety in handling of hazardous lithium ion batteries, strict guidelines and certifications should be in place for battery pack manufacturers and transporters of such goods.
Click here to download our “E2W CXO Survey“.