Electric Two-Wheelers Growing Fast in India
CleanTechnica recently published an article that I had compiled about the progress of BEVs in India. Although the adoption curve looked impressive, the absolute numbers were still miniscule. One of our readers pointed out that the real story was electric two-wheelers in India.
Autocar India tells us that electric two-wheeler sales were up 305% on 2021 figures. The markets for two-wheel EVs has grown from fewer than 2,000 vehicles in 2013 to over 600,000 per year last year. The top 3 producers have been Ola Electric, Okinawa Autotech, and Hero Electric. EV sales constituted 4 percent of overall two-wheeler sales in 2022. Statista estimates that demand for two-wheel EVs in India could be as high as 8.2 million a year. Bear in mind that this is out of an estimated 21 million units sold per year.
All this growth is fuelled by “initiatives from the Indian government to enhance e-mobility in the country,” Statista states.
China, on the other hand, sold 45 million electric two-wheelers in 2022. So, India (with a slightly larger population than China) has a really long way to go.
Mordor Intelligence asserts that The “Asia-Pacific Electric Scooter and Motorcycle Market is valued at USD 612.03 Billion in 2021 and is expected to reach USD 1905.25 Billion by 2027 registering a Compound Annual Growth Rate of 25.4% during the forecast period (2022-2027).”
Sales of electric motorcycles and scooters declined during Covid. However, the market quickly recovered in the second half of 2020 and demand is rapidly increasing. Noise and air pollution in major cities are two more factors driving the market, along with cost reductions and reduced operating costs.
Electric two- and three-wheelers are a good “fit for purpose” for app-based micromobility services. Advances in battery technology and the increasing availability and use of battery swapping stations have also contributed to the demand. Strategic agreements between manufacturers, service providers, and charging companies are building alliances which will accelerate the penetration of electric two- and three-wheelers. It seems like not a day passes without an announcement of another cleaner, greener use being found for e-bikes, e-scooters, and e-motorcycles — personal transport, logistics, food, delivery, tourism, and ride sharing, to name a few.
“E-scooters witness higher sales than e-motorcycles due to lower upfront costs and the availability of more models in the market, which provide ample options for buyers. The allure of the e-scooter, both as a toy and as a potential vehicle for commuting, is driving its adoption. Thus, several start-ups are beginning to flood major metropolitan areas with hundreds of ‘rent by minute’ scooters,” Mordor Intelligence writes. Strange that they listed “toy” as a reason for purchase and that they listed it first.
The Indian government, through its FAME (Faster Adoption and Manufacturing of Electric Vehicles) 2 policy, is encouraging EV adoption. The Indian Finance Minister is even planning to include battery swapping in his FY 22 budget. Adoption of EVs is both market and government driven. Cost reductions are being achieved by the localisation of the manufacture of components. FAME 2 also offers subsidies for high-speed electric two-wheelers.
Easing dependence on imported oil will improve not only India’s balance of payments, but also geopolitical tensions with the West. According to the Hindustan Times, “India imported 68,600 bpd of Russian oil in March 2022, which increased to 266,617 bpd in the following month and reached the previous peak of 942,694 bpd in June 2022. But in June 2022, Iraq was India’s top supplier with 1.04 million bpd of oil. Russia, in that month, became India’s second-biggest supplier.” A dependence on pariah states like Russia and Iran could prove disadvantageous in the long run.
“India is the world’s third-largest oil-consuming and importing nation. It imports 85 per cent of its crude oil needs. Crude oil is converted into fuels like petrol and diesel at refineries. India’s appetite for Russian oil swelled ever since it started trading on discount as the West shunned it to punish Moscow for its invasion of Ukraine.”
With ongoing demand for low-cost electric 2-wheelers, major players are rolling out plans to launch electric versions of their top selling models and massively increase production. For instance:
- Ola claims to have the largest 2-wheeler factory in the world “right here in India.” The company states: “Powered by over 3000 AI-driven robots, the Ola Futurefactory is the world’s most advanced two wheeler manufacturing facility. With over 100 acres of forest cover and a carbon negative footprint, it is also the world’s most sustainable two-wheeler factory.” And now they are teasing an electric car!
- Okinawa Autotech has a vision to protect Mother Earth: “We believe in moving forward without leaving Mother Nature behind. We’re here to nurture a lifestyle that isn’t just rich from the outside, but has deeper values rooted within it, a lifestyle that believes in giving back to the nature.”
- Hero recently announced that it plans to increase its production capacity to 5 million units over the next 5 years to meet growing demand. By the middle of this year, Hero expects to increase production capacity to 500,000 two-wheelers at its Ludhiana (Punjab) facility. In February 2022, Hero announced a partnership with Gogoro to set up battery swapping stations across India as well as launch electric scooters in India powered by Gogoro batteries.
Outside the big 3: Honda Motorcycle and Scooter India is planning to launch an electric version of its best-selling scooter the Activa. “The new EV could be called the Activa E.”
“Ather Energy has opened its second manufacturing facility in Hosur, Tamil Nadu, to meet the growing demand for its 450X and 450 Plus electric scooters. From its current capacity of 120,000 units, the company intends to produce 400,000 units per year,” Mordor Intelligence writes.
“In November 2021, NIU launched the MQiGT EVO electric scooter. The scooter gets a 6.5kW power electric motor, thanks to which its top speed can reach 100km/h. The company claims that this scooter is capable of achieving a maximum range of 75km on a single charge.”
The Indian electric two-wheeler market is indeed powering ahead, and with growth figures like these, it won’t be long before the streets are quieter and the air is cleaner in some of India’s largest cities.
Featured image courtesy of Ola Electric.
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