Electric Two-wheeler: India Market Outlook, June 2021
FY2021 saw the electric two-wheeler sales decline marginally by 5.4% from 152,000 units in FY2020 to 143,837 units in FY2021 due to the disruption caused by the COVID-19 pandemic. However, sales of High speed (HS) E2W (models with speed >25km/hr) witnessed an YoY increase of 47%. Established players such as Hero Electric and Okinawa commanded over 53% of the market share for HS E2Ws in FY2021. Budding players such as Ather, Revolt and Pure EV too increased their respective shares in the market.
High upfront costs were one of the main barriers to EV adoption in India. However, following the recent restructuring of the FAME-II scheme, incentives for E2Ws have been increased from INR 10,000/kWh to INR 15,000/kWh and cap on incentives has gone up from 20% to 40%. This has driven down the prices of E2Ws, bringing it closer to the prices of ICE-2 wheelers. Further, E2W space is anticipated to witness significant disruption after 2023 once the battery prices fall below $100/ kWh. This price is seen as the point around which EVs would achieve price parity with respect to the Internal Combustion Engine (ICE) vehicles. Other drivers for E2Ws are rising fuel prices, falling battery prices and investments in the local battery manufacturing space.
FY2021 witnessed a slowdown in terms of the investments made in the E2W space as compared to the previous years, since the COVID pandemic disrupted and delayed plans of various organizations. In a divergence from previous years’ trends, however, the investments in E2W OEM space have been higher than that in shared mobility sector this year. Within the E2W OEM space, premium HS E2W manufacturing companies have received majority of these investments, securing ~80% of the total investments in the E2W space in FY2021.
In FY2021, 34 new models were launched out of which 19 were LS (low speed less than 25 kmph speed) E2Ws. LS E2Ws, apart from being more affordable, are also exempted from RTO registration and riders don’t need a driving license and there are no helmet compulsions, making them a popular choice. However, these models also pose a challenge when it comes to E2W adoption, as they cannot match the performance ICE counterparts offer and many players who offer LS E2Ws cease to exist in a matter of months, due to low sales margins and increasing competition in the market, denting the confidence of customers.
JMK Research estimates that E2W sales would reach 30 lakh units in the next 5 years, witnessing a CAGR of 84% from FY2021 to FY2026. The growth engine of the E2W market will be fuelled by various drivers, of which strong governmental push and affordability would play key roles.
This report analyses the current electric two-wheeler (E2W) market scenario in India including policy initiatives, current market size, investments in the sector, key market drivers, challenges, market share of key players, and detailed profiles of key players in the E2W market space.
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Table of Contents
1. Executive Summary
3. Policy Updates
4. E2W Market Size
5. Key Market Drivers
6. Key Investments in the Indian E2Ws space
7. New Product Launches
8. Market Share of High Speed E2Ws in India
10. Key Players
– Hero Electric
– Ather Energy
– Ampere Vehicles