India's Electric Two-Wheeler Market Sparks with New Incentives and Growth Projections

Electric two-wheeler adoption in India is growing, with projections for a 13% market share by 2026-27. Despite a temporary reduction in incentives, government schemes aim to boost EV sales. Ola Electric leads the market, though its share recently declined, while Bajaj, TVS, and Ather are gaining ground.

The adoption of electric two-wheeler vehicles in India is on a notable rise, as per a recent report by investment banking company Jefferies, which forecasts a market share increase to over 13% by 2026-27. In the fiscal year concluding in March 2024, electric two-wheelers held a 5% share.

According to the report, the share of EVs in two-wheeler sales surged from just 0.4% in 2020-21 to 5.4% by early 2023, driven by increased subsidies and new launches. However, a cut in incentives has kept the share in the 4-7% range for the past two years, despite manufacturers rolling out cheaper models.

Jefferies now expects electric two-wheeler shares to grow from 5% in FY24 to 7%, 10%, and 13% in FY25E, FY26E, and FY27E, respectively. Nonetheless, these estimates face downside risks due to a new scheme targeting only 2.5 million units over two years. Ola Electric remains the market leader, though its share dropped to 29% in September from a peak of 49% in early FY25, while Bajaj, TVS, and Ather have seen increased market shares.

This week, the Union Cabinet approved the 'PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme' with a budget of Rs 10,900 crore for two years. The scheme includes Rs 3,679 crore in subsidies for e-2Ws, e-3Ws, e-ambulances, and e-trucks, aiming to support 24.79 lakh e-2Ws and other emerging EVs. The Ministry of Heavy Industries will also offer e-vouchers to EV buyers for demand incentives.

(With inputs from agencies.)