- Ownership of electric two-wheelers can lead to cost savings of 20-70%, according to a report from Red Seer.
- Battery performance, charging times and range are acceptance challenges.
- The government has been the fundamental enabler of the early adoption of EVs with FAME and PLI schemes.
Electric two-wheelers are set to grow rapidly in India, thanks to their popularity among B2B players such as
India is the largest two-wheeler market in the world with an estimated 375-400 million two-wheelers on the road. Since affordability is the biggest driver of two-wheeler sales among customers, savings generated by two-wheeler ownership are expected to drive growth. According to the report, owning electric two-wheelers can save 20-70% in cost savings.
Given the relatively lower barriers to entry, the
Given the government’s drive for adoption and the own need of original equipment manufacturers or OEMs to protect against supply shocks, there is also room for growth in localization.
The report also indicates that consumers will also reward the more integrated and sophisticated players. Such OEMs will not only be able to deliver a more cost-effective product, but also deliver a superior experience that builds on internal capabilities to improve and innovate, according to Red Seer.
According to the PWC report, Winning the EV race through localization: An India perspective, the regulatory push has helped kick-start the journey towards EV localization. This is especially true for electric two-wheelers and manufacturers focusing on localization to claim Faster Adoption and Manufacturing of Electric Vehicles (FAME) II benefits that give EV manufacturers a 40% subsidy on the cost of the vehicles .
Yet there are challenges. Battery performance, charging times and range remain the main challenges for both existing electric two-wheeler users and potential buyers.
While the range of most electric two-wheelers exceeds the average distance traveled by more than 90% of their consumers, “range fears” persist, says Red Seer.
A reliable charging infrastructure is needed to build user confidence in electric two-wheelers as a fully viable mode of transport. “Recent internal combustion engine (ICE) two-wheeler buyers have indicated that they will buy an electric two-wheeler next time when more charging stations and fast charging become ubiquitous,” says Red Seer.
The 4As: adaptability, awareness, availability and affordability is a comprehensive approach to entice consumers to switch to electric two-wheelers in the coming years.
However, it is essential to add that the government has been the fundamental driver of early EV adoption with FAME and Production-Linked Incentive (PLI) schemes.
The Red Seer report says it is crucial that the government continues to push the switch to electric two-wheelers to encourage consumers.
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