India is amongst the most polluted countries all across the globe, owing to which, the concerns regarding the environment have been surging. The Indian government has started taking initiatives for somehow curbing the rising air pollution levels. One of those measures is the encouragement to adopt electric vehicles instead of conventional ICE vehicles. Subsidies and tax rebates are being provided to the people who opt for electric vehicles. Other than electric cars, the demand for electric scooters and motorcycles has also considerably increased in the country.
Owing to this, the Indian electric scooter and motorcycle market is projected advance at a robust volume CAGR of 57.9% during the forecast period (2020–2025), as per a report by P&S Intelligence. The number of electric scooters and motorcycles sold in 2019, in India, was approximately 152.0 thousand, which is predicted to reach 1,080.5 thousand units in the end of 2025. Moreover, the retail sales value is projected to increase to more than $1.0 billion by 2025, with a 63.9% CAGR during 2020–2025.
These vehicles make use of Li-ion and SLA batteries for operating. The demand for Li-ion batteries is predicted to increase significantly in the years to come, owing to their reducing prices and increasing government incentives on the purchase of these batteries. Over the last 10 years, the prices of these batteries have fallen down at a rate of 20%, each years. The price for these batteries is further predicted to continue to fall down at an approximate rate of 10% annually, in the next five years.
Owing to the swift growth of the online retail domain in India, the sales of electric scooters via online channels is projected to increase considerably in the near future. The growing internet penetration, rising popularity of electric two-wheelers among youngsters, ease and convenience of shopping through online channels, and rising consumer confidence when it comes to buying from online platforms is predicted to drive the demand for electric scooters and motorcycles in India.
Hence, the market is growing due to the surging air pollution levels and favorable government policies for the adoption of electric two-wheelers in the country.
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