30% e-2W penetration by 2030 | What would it take?

Saurav Agarwala, Co-Founder and CEO of IntuitEV, believes that by 2030, EV sales in the 2W segment will reach the expected 30% penetration, up from 6.2% in CY 2024. He shares his perspective on the enablers and the potential blockers towards achieving this market growth.

What are the top 3 factors that help/enable electric 2W sales grow in India?

• Localization and battery technology

Localisation of production is significantly reducing dependency on imports, lowering manufacturing costs, and making electric two-wheelers more affordable for consumers. Simultaneously, advancements in battery technology are driving down battery costs per watt-hour, which is transformative given that batteries constitute a substantial portion of an e-2W’s overall cost. Together, these trends are making e-2Ws increasingly competitive with ICE vehicles, accelerating their adoption across India.

• The diverse appeal of e-2Ws

Two-wheelers in India have evolved far beyond being a symbol of “my identity, my image” or a mere passenger vehicle. Electric two-wheelers have unlocked a vast market catering to the unique needs of diverse consumer groups.

From daily commuters seeking cost-efficient and eco-friendly transportation to delivery partners relying on dependable and affordable last-mile solutions and rural users benefiting from low-maintenance and economical operations, e-2Ws address a wide spectrum of demands.

This adaptability, combined with a growing consumer focus on sustainability and affordability, drives a significant shift in preferences toward EVs. Consequently, the total addressable market for e-2Ws has expanded exponentially, attracting numerous OEMs and startups. These players are innovating to meet the diverse demand, fostering the overall growth of the e-2W ecosystem and boosting sales.

• Government support

The Indian government is actively driving the adoption of electric mobility through financial initiatives like the PM E-Drive scheme, state-level subsidies, tax benefits, and reduced GST rates. Additionally, policies supporting the development of charging infrastructure, production-linked incentives (PLI) for EV manufacturing, and phased adoption plans are further accelerating the transition to electric vehicles. These measures not only make electric two-wheelers a cost-effective and appealing choice for budget-conscious consumers but also help establish a robust ecosystem for sustained growth in the EV sector.

What are the top 3 factors that would restrict the sales of electric 2 wheelers in India?

• After-Sales service challenges

The EV industry is grappling with poor after-sales service for both vehicles and batteries. A lack of service centres, limited availability of spare parts, and a tendency to replace rather than repair components leave vehicles stranded in service centres. Warranty coverage often fails to adequately address battery issues, and post-warranty repair options are virtually nonexistent, leading to consumer mistrust and hesitation.

• Performance & safety issues

Many e-2Ws suffer from subpar performance due to mismatched design and usage cases, frequent battery failures, or safety concerns such as battery fires caused by low-quality cells. Additionally, discrepancies between promised and actual performance further erode customer confidence, making potential buyers cautious about adoption.

• Market dominance & innovation risk

Larger companies with deep pockets are selling e-2Ws at losses to gain market share, sidelining smaller, innovative players. This practice threatens diversity in the market, as smaller companies catering to niche segments may be forced out. Over time, this could lead to an oligopoly dominated by a few players offering generic solutions, ultimately stifling innovation and leaving consumers dissatisfied with limited choices. This dynamic risks undermining the long-term growth and potential of the e-2W industry.

Also read: India EV Sales Trend | CY 2024