What's driving electric two-wheelers' sales beating ICE two-wheelers? Details
Electric two-wheelers' sales in FY2021 contracted at a marginal five per cent rate compared to the previous fiscal, while petrol two-wheelers witnessed a 13 per cent YoY decline in sales volume in FY2021, claims a study by ICRA.
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The research attributes this lower contraction for electric two-wheeler sales compared to their ICE counterparts to increasing customer awareness about electric vehicles and acceptance.
Apart from that other factors playing key roles behind the growth of electric two-wheeler sales include the high price of fossil fuel, increased preference for personal mobility, rising number of options, improving charging infrastructure, EV financing options, low cost of ownership for EVs compared to ICE vehicles, incentives under several government policies.
Despite the increasing demand and sales for electric vehicles, there are several challenges that pose headwinds for the growth of this segment. As the study points, the current prices of electric two-wheelers are higher than their ICE counterparts in a similar performance range. The high upfront cost including concerns around future battery replacement costs poses challenges in electric two-wheeler adoption.
While the Indian electric two-wheeler market is dominated by low-speed scooters. However, with new models arriving and a higher acceptance rate, the market share of high-speed electric two-wheelers too are increasing, reveals the study.
It says that in recent years, a shift towards advanced, high-speed lithium-ion based electric two-wheelers has been noticed, aided by increased government subsidies under the FAME II scheme and different state EV policies. Also, factors such as improving product technology, increasing supply, declining battery cell prices in contrast to rising petrol prices and overall increasing acceptability of electric two-wheelers with the Indian consumer have played crucial roles.
It also claims that given the size and scale of the two-wheeler industry in India, the electric two-wheeler segment is well poised to lead the electrification revolution in the country.
The research reveals how electric two-wheelers dominate the Indian EV market. At 47 per cent, electric two-wheelers grabbed the lion's share in the EV space in FY2021. The electric passenger vehicles on the other hand contributed merely four per cent to the total EV sales in India in FY2021.