Electric two-wheelers expand by a stunning 132% in 2021, but 2022 seems to be even better.

Nearly 2.34 lakh electric two-wheelers were sold in the country in 2021, led by high-speed scooters, which saw a five-fold increase. However, this is only a foreshadowing of what is to come in 2022, when sales are predicted to more than double as a slew of new entrants such as Ola Electric, Simple Energy, Bounce Infinity, Tork Motors, and Ultraviolet make their mark. All of this is happening while the traditional two-wheeler industry struggles for development like never before.

The past year has demonstrated the impact that subsidies may have on the growth of a new era business. Fueled by significant incentives under the national government's Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India-2 (FAME 2) plan, as well as comparable policies in as many as 18 states throughout the country, sales of high-speed scooters skyrocketed in 2021, posting a staggering 425% increase at roughly 1.43 lakh units.

As a result, for the first time in history, high-speed scooters have overtaken their slower cousins, which require no registration or insurance but receive no government subsidies. Slow-moving scooters increased by a very modest 91,142 units. Last year, the whole category more than quadrupled from over a lakh units to 2.34 lakh. In India's two-wheeler sector, electric mobility has come into its own.

Sale of E-Two Wheelers ( Jan - Dec )

Registered (High Speed)

Non-Registered (Low Speed)

Total

% Registered (High Speed)

2020

27206

73529

100736

27%

2021

142829

91142

233971

61%

Total

425%

24%

132%

-

In the whole EV adventure, we haven't experienced brighter days than the previous several months. We have collectively sold approximately 1 million e2w, e-three wheelers, e-cars, and e-buses in the last 15 years, and we will most likely sell the same 1 million units in just one year beginning January 2022, Sohinder Gill, Director General of the Society of Manufacturers of Electric Vehicles, stated (SMEV). The recent good reforms in EV policy via FAME 2 are a game changer and a bold effort by the government to secure a cleaner and greener transportation sector, lowering dependency on costly and dirty liquid fuel.

Customers have begun to transfer in considerable numbers from gasoline two-wheelers to electric two-wheelers due to cheaper operating costs and maintenance. A considerable proportion of clients consider the environment and sustainability while purchasing an electric two-wheeler.

Even though the transition from unorganized low-speed scooters to organized high-speed scooters was not foreseen, it came as a surprise in 2021. Low-speed scooters, defined as those that cannot travel faster than 25 kph, actually had negative growth in the last two quarters of 2021, with market share falling from a peak of 70% in prior years to less than 15% in the Oct-Dec quarter. The FAME 2 program solely incentivizes cars based on their battery capacity at Rs.15000 per kwh, narrowing the price difference between low and high speed scooters. Hero Electric and Okinawa retained their top two market positions, while Pawan Munjal-backed Ather Energy broke into the top three last year.

"The year 2021 marked a watershed moment for the EV sector. Customers have made a choice decision to transition to EVs, which has been aided by rising gasoline prices, improved charging infrastructure, and more knowledge. Furthermore, the government has offered enormous assistance with a revamped FAME II subsidy structure, as well as other statewide policies, which have helped boost the segment" , said Naveen Munjal, managing director, Hero Electric. We saw a hockey stick boom with upward sales momentum, setting the door for manufacturing capability expansion at our Ludhiana factory from 1 lakh to 5 lakh units to build over 1 million EVs by 2025. In the future years, the country's EV penetration will expand, with sales of 30% private automobiles, 70% commercial vehicles, 40% buses, and 80% electric vehicles projected.

Bull run ahead

The plot is only getting started. Growth in 2021 was mostly organic, with established brands like as Hero Electric, Okinawa, PureEV, Revolt, Ather, Ampere, Bajaj, and TVS posting good sequential growth. Many new firms will enter the market this year, including Ola Electric, which began delivering scooters on December 15, Bounce Infinity, Simple Energy, Tork Motors, and TVS-backed Ultraviolet. The addition of heavyweight Hero MotoCorp will add to the mix.

Sale of top 10 players of registered E Two-wheelers Jan-Dec 2021

Hero Electric

46214

34%

Okinawa

29868

22%

Ather

15836

12%

Ampere

12417

9%

Pure EV

10946

8%

TVS

5368

4%

Revolt

4687

3%

Bajaj

4532

3%

Benling India

4421

3%

Jitendra New EV

1930

1%

Total of top 10 players

136219

Disclaimer:

  • The data doesn’t include low-speed segment.
  • The above data has been collated from the Govt records of Vahan.

"We anticipate that new companies will enter the market and upset it. Several firms have tried to keep up with the pace in the EV industry by developing novel concepts and products" ,Sumit Chhazed, co-founder of OTO, a two-wheeler purchasing and financing platform, stated Bounce has released the Bounce Infinity E1, which has battery switching infrastructure. Ola has invested in product diversification by introducing their Ola Electric scooter, which had earned over one lakh bookings. The volume of bookings demonstrates how open customers are to the introduction of EVs. Legacy brands such as TVS Motor, Bajaj, and Hero Motocorp are not far behind, as they have continually attempted to invest in the most advanced technology, development, and capacity growth.

Investors are betting on EV companies to support this increase in sales. In 2021, financing for EV tech companies reached an all-time high of over USD 444 million (INR 3,307 crore) across more than 25 agreements, a 255% increase over 2020 and a 12% increase over pre-pandemic 2019. The consequences of this will be felt in the years ahead, beginning in 2022.

"Given people's knowledge and possibility for owning or switching to electric cars, we will see a rise in demand with much greater competition. The market is expected to grow from 1% to 10% by 2025, and with supportive policies, it would grow even faster or increase to 20%" ,Munjal stated. India has the largest two-wheeler market, accounting for 17% of category space, with one EV for every 125 cars. There is increased interest and investment in the market, which is expected to be worth INR 94,000 crores over the next five years. With more consumer awareness and the industry working on solutions to issues such as charging infrastructure and range anxiety, the tailwinds exceed the possible headwinds.

Electric-2-Wheelers are currently sold solely on the basis of their range, said Jeetender Sharma, founder and managing director of Okinawa Autotech. It will be critical to develop a framework to balance fallbacks against more appealing attributes of e-mobility such as flexibility, availability, and affordability. In the next years, EV finance, particularly for electric 2-wheelers, will be the most critical facilitator of electric vehicle adoption. Attractive economics and government incentives have already greatly raised demand for electric-two-wheelers, and the sector is projected to develop significantly in the future, as we predict.

SMEV's prediction for 2022 is not a double or triple, but rather up to a six-fold increase over 2021. This comes at a time when the traditional gasoline-powered two-wheeler sector is battling to develop like never before.

According to current monthly patterns, the next 12 months might witness 5 to 6 times the rise of the preceding 12 months, said SMEV's Gill. Currently, all-electric two-wheelers sold in India are referred to as electric bikes or e-bikes, although they are really electric motorcycles (about 2% of the market) or electric scooters (98%) that can easily seat two people and appear like their petrol two-wheeler counterparts. There are no e-scooters like those found in North America or Europe that let the rider to stand and travel short distances.

Electric cycle sales in India (also known as e-bikes internationally) are likewise insignificant and just just getting started. However, within the next two to three years, we will have items in all areas. However, in the next two to three years, we will see goods from major and structured companies in all sectors, including e-scooters, e-motorcycles, and e-cycles. We can now definitely project that roughly 30% of the two-wheeler market will be electric in four to five years.

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