How the future of electric two-wheelers is going to shape up in the coming years

How the future of electric two-wheelers is going to shape up in the coming years

Featured Stories by Team Drivio | 6 Jun 2024

With the recent increase in the adoption of electric two-wheelers by people and the government’s friendlier policies towards EVs, electric scooters and motorcycles are bound to become more popular.

  • Electric two-wheeler makers need to work on stringent safety and quality measures for faster adoption of EVs.
  • Investments of up to $20 billion are expected to pour in for the Indian EV industry by the central government by 2030.
  • More established two-wheeler brands like Honda, Suzuki, Yamaha and Royal Enfield have announced their electric mobility plans for the near future.

The ongoing hype of electric two-wheelers: Is it real?

For a long time, Hero Electric dominated the electric two-wheeler market single-handedly by being the biggest seller of electric scooters. However, ever since the BS6 emission norms kicked in and conventional petrol-powered two-wheelers became significantly more expensive, the demand for affordable mobility increased simultaneously. 

The rising prices of petrol and petrol-powered vehicles encouraged people to look for alternative solutions for cheaper mobility solutions, eventually leading them to the other inevitable path of accepting EVs.

People started accepting affordable electric two-wheelers from budget-oriented brands like Okinawa, Hero Electric and Ampere Electric, who already were operating on lower volumes. However, after witnessing more people accepting electric two-wheelers on a larger scale, several new two-wheeler manufacturers started venturing into the market. 

While brands like Ola Electric and Ather ensured that people get higher-quality and better-engineered offerings, established automakers like Bajaj Auto and TVS also made their foray into the segment. So yes, all the hype around electric two-wheelers is real!

The electric scooter market contributed only 5 per cent to the total volumes of the entire two-wheeler market in 2021-22. However, this share increased significantly in FY 2022-23. Among all the players, Ola Electric has emerged as the largest player, accounting for more than 30 per cent of the market share among all electric two-wheelers. 

How promising are the coming years looking for electric two-wheelers?

The electric two-wheeler industry will continue the momentum generated in FY 2022-23 with an even bigger penetration in the market. Apart from the monthly sales figures, another recent example of EVs' popularity was seen at the Auto Expo 2023, where EV manufacturers put on an impressive display of products.

Brands like Ather Energy, Ola Electric, Ampere, Tork Motors, Matter Energy and Liger Electric have announced their plans for 2023. On the other hand, the space is only going to become more competitive with the established brands finally entering it. While Hero MotoCorp has unveiled its first-ever all-electric Vida V1 scooter, Honda has also announced that it will launch the all-electric version of Activa by early 2024. 

Even TVS, Suzuki, Yamaha, Royal Enfield and Bajaj Auto, have been vocal about their plans for electric mobility.

Is the road to the future of electric two-wheelers smooth enough?

Well, not entirely. While people have started accepting electric two-wheelers more rapidly, the EV industry is still facing some prime challenges, and they are not small ones.

First is the assurance of safety parameters and testing. All the conventional two-wheelers are usually introduced in the market after thorough research and development and multiple testing phases to ensure optimal quality and safety standards. 

And while electric two-wheeler manufacturers claim to do so, various incidents of fire breaking off in electric scooters and below-average build quality of most of the offerings on sale in the market contradict their claims. Electric two-wheelers, especially those of affordable offerings, need to strictly comply with higher safety and quality parameters to ensure they are reliable in the long run.

Another big hurdle coming the way of an even wider acceptance of electric two-wheelers is the limited charging infrastructure or the lack of it in many places. While fast charging stations are becoming more common to see in metropolitan cities, it is still challenging to find one in smaller cities and is almost negligible in rural areas. Even the battery-swapping technology is nascent in India and needs more proper planning and execution.

What is the government’s vision for popularizing electric two-wheelers in the future?

Currently, while the maintenance and running costs of electric two-wheelers are much lower than those of petrol-powered ones, the higher costs of the powertrain are making the former a more expensive deal at the time of buying. However, the central and state government have already introduced various incentives and subsidies under the FAME II scheme. 

These concessions given to the adapters of electric two-wheelers are giving them a significant advantage in bringing down the initial buying costs. Even the recent announcements of Finance Budget 2023 revealed that electric two-wheelers will be more affordable to buy due to concessions in taxes.

And it's not all. While it is expected that the FAME II incentives are here to stay for some more time, the government has also introduced various PLI schemes for encouraging local manufacturing of electric two-wheeler batteries and components like semiconductors. 

It will help in bringing down the production costs of electric two-wheelers, ultimately making them affordable to buy even after the government pulls off its hands from the subsidies given right now.

In addition to these steps, the Indian Government is also working on the faster establishment of fast charging stations and battery swapping programmes. It is estimated that the Indian EV industry will witness investments of around $20 billion by 2030, which currently stands below $10 billion.