Electric two-wheeler market may cross 1 lakh mark

India's electric two-wheeler makers are anticipating a cracking Diwali season, with sales expected to increase by 35–40 percent in November, which will surpass the previous peak of 1,05,000 units in May 2023.

 The first half of the season has already witnessed a strong double-digit growth, with October 2023 sales closing at the 75,000 units sales mark, close to highs seen by the industry pre-full subsidy regime.

Company officials from Ola Electric confirmed that they expect a 35 to 40 percent increase in sales in November, leading up to December, slated to breach an earlier high of 28,276 units in May 2023. To bolster sales, it is providing benefits of up to Rs 24,500 on its product range. 

During a recent analyst call, KN Radhakrishnan, Director and CEO of TVS Motors, stated that on the back of strong demand, the company has increased production of its electric scooter to 25,000 units per month and plans to debut a line of products ranging from 5 kW to 25 kW over the next year. “TVS anticipates that electric two-wheeler penetration will rise to 20-25 percent over the next three years," Radhakrishnan said.

As part of its celebrations, TVS iQube, which has commanded a 24 percent market share in the last few months, is offering a Rs 10,000 discount, inclusive of a cashback of Rs 7,500, as part of its festive benefits, which include other sops.

Ather Energy, like TVS, is offering festive benefits including cash and corporate discounts on the 450X and 450S. Customers looking to switch from petrol to electric scooters are being offered an exchange value of up to Rs 40,000 on both these models. Ather Energy's Chief Business Officer, Ravneet S. Phokela also stated that he expects "The market to return to pre-subsidy levels by the end of the festive season." The pre-subsidy levels before the FAME II Scheme kicked in, were at 1,05,000 units, as per Vahaan data. Hero MotoCorp’s Vida, which was averaging less than 1,000 units in the first nine months of the current calendar year, has seen its sales more than double during the Navratri and Dusshera season from 532 units in September 2023 to 1914 units in October 2023.

Greaves Cotton-backed Ampere, likewise, is banking on the festive season to boost its sales, which have grown from 1,500–2,000 units in June-July, due to the reduction of FAME subsidy, to 4169 units in October, as per Vahaan data. As part of its festive offers, Greaves is offering cash discounts of up to Rs 6,000 on the Magnus EX and Rs 10,000 on the Primus range of electric scooters.

Sanjay Behl, CEO and Executive Director of Greaves Electric Mobility told Autocar Professional, “We remain optimistic that the current festive season will herald a ‘resilient rebound’ (on the back of FAME II subsidies) and the market is poised to achieve new heights.

This industry optimism is also shared by analysts who are of the opinion that the sector is set for growth not only in the festive season but even after.

Pushan Sharma, Director of Research at CRISIL Market Intelligence and Analytics told Autocar Professional, "Given that the festive season will last for another two weeks, we expect the Indian electric two-wheeler market to register 35–40 percent YoY growth.”

The rating agency expects the market to stabilise at 25 percent growth after the festive season.

"Despite a marginal increase in the cost of ownership due to the subsidy adjustment, the average running cost of running an electric two-wheeler is 25–30 paise per km as opposed to Rs 2-2.25 per km for a petrol vehicle makes a significant difference over the life of the two-wheeler which is further expected to fuel this growth further," the CRISIL said in a research note.

EV sales at 6,89,948 units in the first 10 months of 2023 are 42 percent higher than the same period in 2022. This year's retail sales at 688,442 units have topped 6,31,174 units sold in 2022, according to the Vahaan portal.

This feature was first published in Autocar Professional's November 15, 2023 issue.