Electric two wheeler sales volume in India expected to reach 22 million by 2030, says Redseer report

• India is predominantly a two-wheeler market with its overall EV penetration, including two wheelers, as of CY2022, at 3.2%.
  
• Challenges faced by two-wheeler users in India are range anxiety, poor infrastructure, slow battery recharge, unavailability of prompt support network and poor build.
  
• The report reiterates the importance of the government as the fundamental enabler for early EV adoption with FAME India and PLI schemes.
  

The electric two-wheeler sales volume in India is expected to reach 22 million by 2030, according to the latest report on electric two-wheeler (E2W) landscape in India by global consultancy firm Redseer Strategy Consultants.

India is predominantly a two-wheeler market with its overall electric vehicle (EV) penetration, including two wheelers, as of CY2022, at 3.2%. Whereas, in other developed countries the EV market is dominated by four-wheelers with four-wheeler penetration as high as 63% and 56% in USA and China respectively, Charging the future for a greener plant, Electric 2W – Adoption from 0 to 100 report revealed.

One of the critical drivers of growth is the rise of numerous brands in the E2W space, such as Ather, Ola, Hero Electric, Bajaj, TVS, Okinawa, PURE EV, and Revolt. More options are pushing better adoption across price points. As a result, electric two-wheeler sales across India are on the rise, including in Tier 3 and Tier 4+ cities, Redseer revealed.

“As per our research, while the E2W 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% compared to an ICE vehicle,” said Aditya Agrawal, partner at Redseer Strategy Consultants.

Limited range, poor charging infrastructure and more plague India’s 2W market

Despite strong market tailwinds, challenges remain for faster adoption of E2W: from both demand and supply-side. The primary challenges faced by electric two-wheeler users in India were poor battery charging infrastructure, limited top speed, unavailability of prompt support network, less range and poor build quality, as per the report.

“Although the benefits of switching to E2Ws are clear, there are many challenges to overcome, with range anxiety being the most prevalent barrier among consumers. The range offered by most E2W on the market is much higher than the average distance travelled, which is about 25 km, with 90% of the users travelling less than 50 km/day. However, a long ride is still a challenge in E2W owners’ minds,” added Agrawal.

Recent internal combustion engine 2W buyers also indicated they would buy electric two wheelers next time if more charging stations and fast charging are readily available across the country, revealed the report.

What will lead to EV growth in India?

The primary actions required to achieve more than 80% of 2W electrification were making EVs affordable through emerging cell technology and localised cell manufacturing. Furthermore, for E2W, omni channels and better offline stores will also accelerate growth.

“OEMs (original equipment manufacturers) must come together to ensure no unsafe vehicle is rolled out on the road. Recent vehicle fires have made the customer wary, impacting sales volume,” Redseer said. Increased awareness of benefits of owning an electric vehicle were also highlighted.

The report further elaborates that the E2W ecosystem must work on 4 As-Adaptability, Awareness, Availability, and Affordability.

The report reiterates the importance of the government as the fundamental enabler for early EV adoption with Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India) and Production-Linked Incentive (PLI) schemes. These schemes should continue for the next few years until E2W becomes mainstream, as there have been reduced E2W sales in geographies where state subsidies were rolled back, Redseer observed.

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