Prices of lithium-ion batteries have dropped 89% in the last 10 years. It has pushed prices of electric two-wheelers down and drawn more investments. However, the key to growth lies in scaling up charging stations.
Nothing short of global scale would have kindled interest, as the Indian electric two-wheeler sector has been teeming with startups and traditional two-wheeler manufacturers launching new products and investing in new capacities. Amid a capex drought in the country, the electric two-wheeler sector has been an island of hope.
In the first three months of calendar 2021, India saw the launch of 11 new products in the electric two-wheeler segment. More are in the pipeline.
While Ola’s mega factory is looking at exports too, interest in the sector is being driven by domestic demand. Electric two-wheeler sales have grown by over seven times in the last six years, but this is on a small base.
Looking ahead, the share of electric vehicles in the total two-wheeler market is estimated to grow from 0.8% in 2020-21 to 12.8% in 2024-25, according to JMK Research & Analytics.
Demand is expected to come from both individuals, and from the delivery and ride-hailing businesses. Demand from e-commerce/delivery businesses is expected to grow at a compounded annual rate of 15-30% through 2025, according to McKinsey estimates.
While early adopters of electric vehicles tend to be environmentally conscious, demand for electric two-wheelers is primarily driven by economics.
Source: livemint.com
