Scooters and EVs new driving force of Indian two-wheeler market; leave past motorcycles

The Indian two-wheeler industry has been witnessing a significant shift in consumer preferences. Motorcycles are no longer the driving force of the Indian two-wheeler market, but scooters and EVs are. The market grew from 18 million units in FY24 to 22.3 million units in FY26, but the incremental growth shifted towards scooters and EVs, not motorcycles, according to a study by Jato Dynamics.

The study revealed that scooters have been gaining market share faster due to stable, recurring demand as compared to seasonal motorcycle demand. The penetration of electric vehicles in the segment remains low at 6.1%, but it is growing gradually, with the adoption concentrated in the urban scooter category.

Another key finding of the study is that Honda is gaining in the motorcycle segment while TVS Motor Company is strengthening its position in the scooter segment. The study also predicted that the future growth of the Indian two-wheeler market will depend on urban demand and EV economics, favouring the companies with scooter and EV exposure.

Category-wise trend shows structural shifts

The industry’s growth from 18 million to 22.3 million units appears broad-based, but category shares have revealed divergence. Motorcycle share in the market declined to 60.5%, while scooters gained 0.9%. This shift is small in absolute terms but quite meaningful in a large market like India, indicating where incremental volumes are coming from.

The study has stated that monthly data also supported this trend. Demand for motorcycles fluctuates around 55%-65%, driven by festive demand, while demand for scooters remained stable and rose to around 35% in non-festive months. This indicates that scooter demand in the country is recurring, while motorcycle demand remained seasonal. This category-wise difference has commercial implications. Recurring demand segments tend to have better pricing stability and margin potential, while seasonal segments are more volatile. As scooters capture a larger share of baseline demand, the profitability mix of the industry begins to shift, the study stated.

The study also revealed that motorcycles declined from 63.6% to 61.9%, while scooters increased from 36.4% to 38.1%, a shift that is gradual but consistent and aligns with broader demand trends.

Petrol vs electric two-wheeler transition

Petrol-run two-wheelers remain dominant in the sales mix in the Indian market, with share declined only marginally from 94.9% to 93.9% between FY24 and FY26. On the other hand, EV penetration increased by 1%, but this represents around 20% relative growth, which is meaningful for an early-stage segment.

Monthly EV share ranges from 4.3% to 9.0%, compared to ICE at 91.0% to 95.7%. This volatility shows that EV adoption is not yet stable in India and is dependent on pricing, incentives, and infrastructure.

The marginal decline in ICE two-wheeler share also indicates that the transition to EVs is gradual. EVs are not replacing ICE at scale but adding incremental demand in specific segments. This is consistent with cost dynamics, where ICE vehicles remain more affordable and better suited to rural usage.

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