Electric Two-Wheelers and Government Initiatives
A subsidy of 15,000 rupees is intended for electric two-wheelers to encourage the faster adoption of e-scooters and motorcycles, while 25,700 rupees will be sold for high-speed scooters with speeds up to 45 km / h from 2019-20. The policy needs to be overhauled, Naveen Munjal, chief executive of Hero Electric, told broadcaster HT.
Under the second phase of the Fast Adoption and Manufacturing of Electric Vehicles in India (FAME II) program, 10% of registered electric two-wheelers with a maximum factory price benefit from an incentive of 20,000 rupees, and high-speed electric two-wheelers benefit from the scheme.
A city-speed electric scooter with a range of 100 km costs less than Rs 60,000 and a high-speed scooter with a range of up to 80 km comes with a price tag of Rs1 lakh.
The incentive of 10,000 rupees per kWh was increased to 15,000 rupees per kWh and was capped at 40 percent of the cost of the vehicle. Additional income tax deductions and credits are available for purchasing electric cars. According to a live switch on the official website, the program managed to stimulate the sales of more than 76,000 vehicles over the last two years, which totaled more than Rs 221 crore in incentives.
West India’s transition to e-mobility depends on affordable zero-emission mobility. The new electric vehicle policy announced by the Delhi government last year was praised as a model for other cities and states across the country.
In India, the segment of electric scooters is one of the fastest-growing green vehicles. A number of start-ups are looking to launch new electric two-wheelers for commercial and passenger use, while major car manufacturers are considering new launches in the electric vehicle sector, making them one of the most active development areas in the entire automotive sector. A wide range of electric car start-ups and major automakers such as Bajaj Auto, TVS, Hero Electric are jostling to grab a significant slice of the market pie.
While the established players dominate the market, there are growth opportunities for regional and local players. In order to remain competitive in the Indian market for electric two-wheelers, several regional or local players are focusing on developing innovative products, expanding their product portfolios, and investing heavily in research and development.
In FY2020, the Indian market for electric two-wheelers was 152 thousand units in volume and is expected to grow by 2.5% between FY2021 and FY2026. Management consultancy McKinsey estimates that the market will reach 4.5-5 million by 2025, representing 25-30% of the total market, and nine million by 2030, or 40% of it. The scooter market size could be as large as 5.6 million units with the potential to change the competitive landscape to Rs 34,000 crore, stating the report.
The market for electric two-wheelers in India is expected to grow by 4.4% between 2019 and 2025. The market for electric two-wheelers in India is developing rapidly, owing to increased government support for battery-powered vehicles, growing environmental awareness, rising gasoline prices, and strict emission standards. The Indian government has taken several initiatives to boost sales of electric vehicles, including two-wheelers.
The acceleration of consumer adoption of alternative electric vehicles over conventional fuel vehicles is not surprising. Electric motorcycles and scooters have received more attention worldwide than electric cars.
India is home to the world’s largest motorcycle market, driven by the warm embrace of two-wheelers by the country’s 1.3 billion people. Here, two-wheeled motorcycles account for 76% of all vehicles on the road and account for a whopping 30% of the country’s pollution.
If we assume that the market entry of executive motorcycles and scooters into the urban market is complete, there will be a 20% transition from rural two-wheelers and ex-premium motorcycles to electric two-wheelers by 2026. If a further six million units are added, demand elasticity of up to 50 percent for the mix of electric two-wheelers on the domestic market will be achieved by 2026.
While the biggest group of new vehicles will be electric-electric motorcycles and scooters on the world’s roads over the next decade, a growing share of them will be electric, manufacturers and analysts say. Over the next four to five years, the market entry of petrol motorcycle executives will gradually shift to electric vehicles by partially replacing existing models, creating new markets, and making demand more resilient.
In general, electric two-wheelers perform better than other modes of transport in terms of accessibility, flexibility, reliability, speed, use of road space, and external environmental factors. They address the major negative impacts of fossil fuels on air quality, climate, and noise, close gaps in the existing two-wheeler segment, and offer unlimited flexibility in the architecture and integration of emerging smart and connected technologies.
We believe that the time has come for the mass introduction of electric two-wheelers and such initiatives, combined with government mass education campaigns and simple finance conditions by public banks, will put us on track to generate 30% of the two-wheel market electric within five years.
With the launch of Ola Electric e-scooters in the coming months and Hero Motocorp, a partnership with Taiwan’s Gogoro to develop a battery exchange network for electric two-wheelers in the government, the company is preparing to enter the electric scooter segment in 2022.
The model from Hero Electric, a division of India’s largest two-wheeler manufacturer, is competitively priced for low-cost motorcycles. The cost of lithium-ion batteries makes vehicles that run on expensive, especially in emerging markets. This is an opportunity for what Arya calls the electric vehicle space in India, where companies can see the costs and benefits of electric propulsion.
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