Electric Vehicles: Future of Indian 2 Wheeler Industry? Check out what the experts think

What started as just a blip on the radar in the fiscal year 2020-21 (FY), data from the Ministry of Road Transport and Highways (MoRTH) revealed that electric two-wheelers accounted for a modest 0.3 percent of all two-wheelers. sales, which have increased to a significant 5.4 per cent share by FY 2023-24. This exponential growth trajectory underscores the growing acceptance and adoption of electric two-wheelers among Indian consumers, driven by factors such as environmental consciousness, cost-effectiveness and technological innovation.

A recent report titled ‘Surging Ahead: How Electric Two-Wheelers are Gaining Popularity’, published by Boston Consulting Group (BCG), provides insights into the evolving dynamics of the E2W market in India. The report identifies ten distinct “demand spaces,” each characterized by specific customer needs and usage patterns, highlighting the nuanced nature of customer preferences across the electric mobility landscape.

Unlike traditional demographic-based segmentation, these demand spaces are defined based on factors such as travel distance, purpose and lifestyle preferences, reflecting a holistic understanding of consumer behavior.

Key findings

One of the key findings of the BCG report is the increasing influence of functional and emotional factors in shaping consumer preferences towards electric two-wheelers. While some consumers prioritize practical considerations such as affordability and ease of maintenance, others are drawn to the eco-friendly appeal and futuristic appeal of electric mobility. This diversification of consumer needs underscores the importance of offering a diverse range of E2W options to suit different preferences and lifestyles.

Additionally, the report highlights the evolving consumer mindset towards electric mobility, with one in three potential two-wheeler buyers actively considering electric options. This growing awareness and acceptance of electric vehicles (EVs) among Indian consumers represents a significant shift towards sustainable transportation solutions, laying the foundation for rapid adoption and market growth in the coming years.

To capitalize on this growing market opportunity, stakeholders in the E2W ecosystem must adopt a multifaceted approach that includes product innovation, infrastructure development, and consumer education. OEMs (Original Equipment Manufacturers) need to prioritize target value pools and tailor their product offerings to align with the various customer demand spaces identified in the BCG report. Additionally, investing in innovative go-to-market strategies, such as seamless customer experiences, competitive pricing, and robust charging infrastructure, is critical to achieving widespread adoption and market penetration.

In addition to product-focused initiatives, fostering collaboration across the ecosystem, including government bodies, industry players and technology providers, is essential to overcome barriers to adoption and accelerate the transition to electric mobility. By leveraging synergies and pooling resources, stakeholders can address key challenges such as range concerns, charging infrastructure gaps and consumer awareness, thereby fostering an enabling environment for E2W diffusion.

Also Read: Amitabh Kant urges Indian electric two-wheeler companies to go global

Furthermore, investment in organizational capabilities, including talent development, R&D (research and development), and strategic partnerships, will be instrumental in creating sustainable competitive advantage in the rapidly evolving E2W landscape. As the electric mobility market continues to evolve, agile and adaptive strategies will be essential to stay ahead of the curve and capture a significant share of the growing market opportunity.

Electric two-wheelers are set to revolutionize the transport sector in India, offering an exciting blend of environmental sustainability, economic viability and technological innovation. With the combined efforts of stakeholders across the value chain, electric two-wheelers have the potential to not only enhance urban mobility but also empower millions of Indians with clean, accessible and affordable transport solutions.

Date of first publication: 07 May 2024, 10:53 AM IST