Most Exhaustive Report

Electric Two-Wheeler Market in India - Industry Outlook and Forecast 2020-2025

Most Exhaustive Report

Electric Two-Wheeler Market in India - Industry Outlook and Forecast 2020-2025

SKU : ARZ200305 Published on : March 2020
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This market research report on the electric two-wheeler market in India covers sizing and forecast, market share, industry trends, growth drivers, and vendor analysis. The study includes insights on the segmentation by technology (removable and non-removable), Battery (lithium-ion and lead acid) Vehicle (scooters and motorcycles), Voltage (48V, 60V, and 72V & above), Speed (high and low), and Geography (India (Northern, Southern, Western, and Eastern)).

Market Dynamics

The electric two-wheeler market in India is emerging on account of increased government policies supporting battery-powered vehicles, the growing awareness toward the environment, increasing petrol prices, and stringent emission norms. The Government of India has taken several initiatives to boost the sale of electric vehicles (EV), including two-wheelers. In 2013, with the launch of the National Electric Mobility Mission Plan 2020, which aims to increase the adoption and manufacturing of EV in India (FAME India), around 90% of the vehicles that availed incentives, were battery-powered two-wheelers. Similarly, in the Union budget 2019, the government had framed several policies and announced rebates on battery-powered vehicles. Hence, the remission to customers on interest to buy battery-powered vehicles is expected to increase adoption and demand for battery-powered scooters and motorcycles.

Another important driver contributing to the growth and adoption of EV, especially scooters and motorcycles, is the growing awareness of greenhouse gas emissions and environmental pollutions. Electric vehicles have the potential to reduce dependence on crude oil. India is witnessing a rise in environmental consciousness, thereby driving government agencies to take initiatives to curb the practices that are increasing environmental risks. Therefore, the cost-effectiveness of EVs due to government incentives and long-term fuel savings along with environmental friendliness are key factors increasing the purchase of electric vehicles in India.

Snippets

  • The Uttar Pradesh government is planning to set up nearly 2 lakh slow and fast charging stations by 2024, thereby boosting the adoption of battery-powered vehicles
  • In Delhi, delivery services are expected to shift 50% of petrol-powered two-wheelers to battery-powered ones by March 2023.
  • The Maharashtra government has proposed a policy for the installation of charging stations for EV, with a 25% capital subsidy on equipment and machinery.
  • The Gujarat Government introduced a single-window facilitation portal for electric vehicle investors. It is a centralized system to monitor applications related to EV and helps to have a user-friendly and simplified application process for registrations.
  • The Tamil Nadu government offers a 100% road tax exemption for battery-powered two-wheelers till December 2022.

The electric two-wheeler market in India is expected to grow at a CAGR of over 44% during the period 2019–2025.

 Electric two-wheeler Market in India: Segmentation

This research report includes detailed market segmentation by technology, battery, vehicle, voltage, speed, and geography

 

Insights by Technology

The removable battery segment is expected to grow at the highest CAGR during the forecast period. As electric scooters and motorcycles face the challenge of charging infrastructure, removable batteries have emerged as a solution in India. Removable batteries are more in demand than non-removable ones as they provide charging at home. They are expected to be a gamechanger. The change to detachable batteries will double the country's speed toward electrification. Swappable batteries are also a major idea, which is currently emerging among several electric two-wheeler companies.

Non-removable batteries, on the other hand, have witnessed a low penetration. They cannot be easy charged at home or in public places. To support non-removable batteries, vendors are changing technology and are coming up with new ideas, which is expected to enhance their features and efficiency. Manufacturers are coming up with scooters that run on non-removable batteries with in-built charging facilities. This in-built technology is expected to make an impact as there is no trouble to charge the battery separately.  Several such technologies are expected to arrive in the market for making electric scooters and motorcycle feasible and convenient in the future.

Insights by Battery

Currently, several electric two-wheeler manufacturers utilize lead-acid batteries as they are easy to procure and cost-effective. However, lithium-ion batteries are also witnessing demand as they are better in terms of range, speed, and charging. Although the share of lead-acid batteries is expected to lead during the forecast period, lithium batteries are likely to grow significantly by volume. A high-speed lithium-ion battery-powered scooter or motorcycle costs two times than a low-speed lead-acid battery strapped version. Therefore, due to the low cost of manufacturing, manufacturers continue to produce electric two-wheelers based on lead-acid batteries, thereby driving the segment growth. Although lead-acid batteries are expected to be phased out due to their low capacities and efficiencies, depths of discharge, and reduced low lifespans, lithium-ion batteries are the future of electric transportation. The availability of subsidies and increasing efficiencies in lithium-ion battery technology is expected to increase application.

Insights by Vehicle   

With India's major automobile manufacturers entering battery-powered vehicles manufacturing, electric scooters and motorcycles are gradually becoming mainstream transportation. Backed by the “Make in India” initiative and the rise of indigenous start-ups, the government has targeted to be 90% electrical by 2025. The e-scooter and motorcycle market has grown significantly in the last three years on account of government subsidies and initiatives. Battery-powered scooters and motorcycles are spearheading the e-revolution in India. Although electric scooters and motorcycles make up a fraction of the total two wheelers currently, the demand is expected to pick during the forecast period. Scooters, as well as motorcycles, can be charged fast and easily via existing plug-in points at homes. By the year 2030, the sale of electric scooters is expected to exceed 2 million. However, after the launch of the FAME II scheme in April 2019, there was a sharp decline in the sale of electric scooters and motorcycles on account of low subsidy, which eventually increases the cost of electric scooters and motorcycles. Further, with decreasing air quality and rising traffic becoming the most worrying challenge in major Indian cities, e-scooters hold the potential to emerge as a safe and viable alternative.

Insights by Voltage 

The voltage of a battery is a major differentiator in EV as it impacts range, speed, mileage, price, and weight. 48V batteries experience high importance in the electric vehicle market as they are cost-effective and safe. These batteries are in demand from automotive, industrial, and communications industries. 48V batteries with suitable current capacity are the most reasonable combination in terms of range and safety. Hence, 48V voltage batteries are expected to have the majority share in the electric vehicle battery segment.

60V batteries are the second most preferred in the electric two-wheeler market. In terms of battery type charger, 60V Lithium-ion battery chargers are designed with ultra-high efficiency and complete metal case enclosures. The extraordinary performance of low-power dissipation provides high reliability and a super long service life, which is increasing their penetration. Moreover, manufacturers are shifting toward low to medium range (60V) electric vehicles due to stringency in emission norms. The shift of consumers toward low-cost and medium-range electric vehicles is expected to influence the demand for 60 voltage batteries during the forecast period.

As consumers are reluctant to buy EV because of low-power capacities, the demand for 72V and above batteries is likely to grow in the future. With the introduction of several incentives and initiatives by the Government of India, battery costs will decrease, and the demand is expected to increase in high-range electric two-wheelers.  Currently, the adoption of high-voltage battery-powered scooters and motorcycles is low due to high cost, however, the change in consumer demand and lifestyle is expected to boost the segment. 

Insights by Speed

Electric two-wheelers have greatly penetrated the market. The high-speed two-wheeler segment receives support from the government in the form of subsidies. According to the new standards (FAME II), battery-powered scooters and motorcycles with a minimum range of 80 km and a top speed of 40 km/h are eligible for the subsidy, thereby boosting the segment. Hence, manufacturers are coming up with several types of high-speed electric scooters and motorcycles, which are expected to have a top speed range between 40 and 80 km/h. Thus, high-speed two wheelers are projected to be high demand during the forecast period.

Although low-speed electric two wheelers are not eligible for any incentive under the FAME II scheme, they have a high share on account of cost-efficiency. Nearly all low-speed batteries run on lead-acid batteries, making them feasible and less expensive. Therefore, it constitutes the majority of battery-powered vehicles. However, a low load carrying capacity and the use of lead-acid batteries are the major limiting factors for the adoption of low-speed battery-powered two-wheelers in India.

Insights by Geography

The Indian automobile industry became the fourth largest producer in the world by manufacturing more than 30 million passenger and commercial vehicles in 2019. The Indian automobile market is among the top five markets with the highest FDI inflows. There is a huge scope in the automobile market in India with the growth in infrastructure, technology, and consumer demand. With the increase in population and automobiles in India, pollution levels are soaring. Hence, the introduction of electric two wheelers is the preferable solution in the country. India is recognized as one of the fastest-growing countries in terms of technology usage, literacy, disposable income, and provides a conducive business environment. These factors have been the major attraction for domestic and foreign investors to invest in the EV industry. With the government pushing toward electric two-wheelers to curb pollution and reduce dependence on fossil fuel, the adoption of EV is expected to increase.

Long-term investments in R&D are expected to generate robust growth during the forecast period. The electrification of the automotive industry aims at achieving the stated objectives by decarbonizing the transport system. Andhra Pradesh, Bihar, Delhi, Karnataka, Kerala, Maharashtra, Tamil Nadu, Telangana, Uttarakhand, and Uttar Pradesh are ten states and union territories that are leading the way in building production, infrastructure, and services to increase the momentum of electric vehicle usage in India.

Key Country

  • India
    • Northern
    • Southern
    • Western
    • Eastern

Insights by Vendors

The Indian electric two-wheeler market is a highly competitive market with several regional and local players. A majority share of the market is captured by Hero Electric (Ather Energy), Ampere, Okinawa, and many others. To maintain a competitive edge in the market, the players are focusing on developing innovative products and increasing their product portfolio by making high R&D investments.

Although the established players dominate the market, growth opportunities for regional and local players also exist. The competitive intensity is higher in the Northern and Southern regions of India due to growing technology and infrastructure projects in the electric two-wheeler market. Northern and Southern India states majorly contribute to the electric vehicle segment. In contrast, few states such as Maharashtra and Gujrat in Western India also contribute higher than other states of India.

Service extensions and technological innovations are expected to intensify competition. Vendors compete on several factors such as brand, geographical presence, product portfolio, features of the products, power consumption by the two-wheelers, and efficiency of the products developed. Power, charging capacity, and design are the major product differentiating factors in electric two-wheelers.

Vendors

  • Bajaj Auto
  • Okinawa
  • Menza Motors
  • Lohia
  • Ather Energy
  • Hero Electric
  • BattRe Electric Mobility
  • Avon Cycles
  • Ultraviolette
  • YoBykes
  • Avera
  • Crayon Motors
  • Techo Electra
  • Goreen e-mobility
  • M2GO
  • Evolet
  • Raftaar
  • Palatino
  • Komaki
  • SuperEco
  • Yukie
  • Ampere Vehicles
  • 22 Kymco

Key Market Insights

The analysis of the electric two-wheeler market in India provides sizing and growth opportunities for the period 2020–2025.

  • Provides comprehensive insights on the latest industry trends, market forecast, and growth drivers in the market.
  • Includes a detailed analysis of market growth drivers, challenges, and investment opportunities.
  • Delivers a complete overview of market segments and the regional outlook of the market.
  • Offers an exhaustive summary of the vendor landscape, competitive analysis, and key market strategies to gain a competitive advantage in the market.

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