INDIA ELECTRIC SCOOTER AND MOTORCYCLE MARKET
- Rising petrol prices, increased cost of scooters due to BS 6 implementations and subsidies for electric vehicles will drive the electric 2 wheeler market
- As of June 2021, there are ~32 electric scooter and motorcycle brands offering ~11 models in India. Ex-showroom prices vary between 40k-110k INR($550-$1,000)
- Less than 20 models are powered by Li-ion batteries and the majority still has Lead-acid batteries. Li-ion battery manufacturing is dependent on expensive imports
- The electric scooter market in India will remain concentrated in 8 tier-1 cities, at-least till 2023
- Electric scooters and motorcycles equipped with embedded connectivity is the #1 trend in India electric scooter and motorcycle market
- Multiple fleet-based operatives are also focused on electrifying their fleet, due to cheaper running prices as well as easier implementation of various sensor-based management systems such as vehicle tracking, charge present, software updates for usage etc.
- The market will be driven by both personal vehicles as well as vehicles for commercial purposes and fleets.
INDIA ELECTRIC SCOOTER AND MOTORCYCLE MARKET DYNAMICS
The Indian two-wheeler market is completely dominated by low-cost products. More than 85% of two-wheelers sold in India cost less than $1,000. A very high 28% GST on all categories of two-wheeler has been already squeezing margins of OEMs.
The entry level two wheelers like TVS XL, Bajaj CT 100 and Hero Splendour cost ~$550-$650 ex-showroom.These prices are the lowest globally for any powered two-wheeler. For reference, the average transaction price for two wheelers in Europe and the US was $3,900 and $9,600 respectively in 2020.
Indian scooter market has an annual market volume of ~7 Million units and they are bought by diverse demographics. Therefore, electric vehicle manufacturers are targeting that segment first. Although, ATHER`s first electric scooter(priced at ~$1,800) failed to get expected volumes the company is betting on launching multiple new scooters at a comparatively lower price. Currently, Ather is priced from Rs 1.07 Lakh ($1,400) onwards across the country depending on state-wise subsidies. The pricing is close to multiple prominent scooters such as TVS N-torq etc. with decreased running price thereby alluring customers towards electric 2 wheelers.Ather sold 3,000 units in 2020 and is expecting to double that in 2021.
The reduction of GST on electric vehicles from 12% to 5% in July 2019 is expected to drive India electric scooter and motorcycle market volumes in the medium term.The central government subsidy for two-wheelers i.e. Rs 15,000 per kWh of battery capacity, up to 40 per cent of the vehicle cost will help OEMs price electric 2 wheelers very close to ICE scooters especially in their target markets of Tier 1 and Tier 2 cities where the purchasing ability is higher.
At present, city speed electric two wheelers(<40kph, 1kwH battery and <60km range) account for ~90-95% of India electric scooter and motorcycle market.
INDIA ELECTRIC SCOOTER AND MOTORCYCLE MARKET SIZE AND FORECAST
The Indian market is dominated by utilitarian 100cc motorcycles and scooters. The motorcycles are popular in tier-3 cities and rural areas, whereas gearless scooters enjoy a strong following in urban areas.The automatic/gearless scooters,powered by small 100-125cc engines, are being looked at as a major opportunity for electric scooter motorcycle manufacturers.
The implementation of BS 6 norms have increased the prices of the scooters across the country and the increasing fuel prices aren’t helping their cause. Due to the income decrease across the country following Covid 19, vehicle maintenance as well as running costs will be closely looked at which favors electric 2 wheelers but the initial price is still a hurdle along with range anxiety.
The electric scooter and motorcycle market in India is estimated at 175k units in 2021, and is estimated to grow at XX% CAGR till 2026.
Hero Electric and Okinawa are at present the market leaders with more than 65% combined market share in India. Among mainstream two-wheeler manufacturers, only Hero Electric, TVS and Bajaj have shown serious effort to launch electric vehicles.Hero electric dominated the market and was the market leader while Bajaj Cheetak was only able to sell 1,200 units in 2020. There are 32 OEMs including various startups such as Tork, Emflux, Ultraviolette etc. as well as OEMs who source kits from China and assemble them in India. In 2020, only 12 OEMs achieved sales in triple digits and beyond in India.
OEM`S EXPANSION PLANS FOR INDIA ELECTRIC SCOOTER AND MOTORCYCLE MARKET
Hero Electric has planned to invest ~$100 Million till 2023 to develop new vehicles, expand distribution and dealership network and increase production capacity to retain leadership. Although, the volumes are limited but looking at a huge market size and opportunity we expect many new entrants in the India electric and scooter motorcycle market
Ather Energy now has a total funding of $140M(800 CR INR), as of June 2021. It’s first manufacturing plant was in WhiteField, Bengaluru, with an installed capacity of 20,000-25,000 units per annum.
It wants to expand sales and distribution to 30 cities. It raised $35 million (260 CR INR) in its latest round of funding, started a new manufacturing facility as well as charging infrastructure in multiple big cities to attain 1 Million unit sales per annum by 2023-2024.Ather Energy has earmarked $20 Million(130 CR INR) to set up 6,500 charging stations across the country by 2023. Ather overall plans to spend Rs 635 crore from 2021-2026 to increase production, sales and infrastructure.
In Jan 2021, Ather began EV manufacturing plant in Hosur, Tamilnadu. The annual capacity of the plant is 1,10,000 scooters and 1,20,000 battery packs.
Hosur was chosen is because it’s just 50-60kms away from its R&D facility in Bengaluru and due to presence of TVS and Ashok Leyland the auto component supplier base is well established. Except for the battery cells, all components of the Ather scooter are sourced from India and Hosur will be a strategic point for production.
Okinawa sold 5,600 units in 2020.It has acquired land near Bhiwadi, Rajasthan(Western India) for the new plant, which will have a total electric two-wheeler manufacturing capacity of one million units per annum- a 10X increase from the current capacity.
It has improved localization to about 80%. The company had been working on increasing localization in its scooters since 2017 therefore, it was able to meet the requirements as outlined under FAME II announced in March 2019.
It also plans to increase the total number of dealerships from 350 dealers in 2020 to 500 dealers in the coming years.
Ola Electric acquired Amsterdam-based Etergo BV in 2020. Ola also invested Rs 2,400 crore investment for setting up their manufacturing facility in Krishnagiri, Tamil Nadu. The vehicle is expected to launch in Q3 2021.
The fast charger for the scooter is expected to charge the scooter up to 50% in 18 minutes for a 75 km range. The new scooter can come with a range of 150 km in one full cycle. The scooters developed and manufactured will also hit the European market mainly France, Italy, Germany and other western European countries.
Ola will also be setting up over 1,00,000 charging stations across 400 cities and towns in the country. 2021 of the 5,000 charging points as part of this network will be set up in 2021-2022.
THIS REPORT WILL ANSWER THE FOLLOWING QUESTIONS
- Market Size and Forecast of Electric scooter market in India(Volume and Value)
- Market Trends,risks, drivers and opportunities in India electric scooter market
- Market share of electric scooter manufacturers in India
- Growth strategy of electric scooter manufacturers in India
- Impact of upcoming BS VI emission norms on the electric scooter market in India
- The impact of new electric two-wheeler startups on the motorcycle market in India