Electric Two-Wheelers Market: What are the Key Growth Factors?

Greening the earth is arguably one of the biggest trends today. While the literal meaning of ‘green earth’ might hint at reforestation, the concept also includes bringing down the pollution levels. Now, since automobiles are one of the biggest sources of air pollution, a major change is being brought about in their functioning. Their internal combustion engines (ICE), which burn gasoline and diesel, and, therefore, release greenhouse and toxic gases into the atmosphere, are being gradually replaced with electric batteries and motors.

To achieve this, governments around the world are implementing stringent emission regulations, which are making conventional automobiles costlier every year, and offering financial support to boost the manufacturing and sales of electric vehicles (EVs). P&S Intelligence expects the electric scooter and motorcycle market size, driven by all these factors, to rise from $5,913.9 million in 2019 to $10,529.7 million by 2025, at a 14.4% CAGR between 2020 and 2025. One of the policies implemented to boost electric two-wheeler sales is the FAME India II scheme, under which purchase incentives are being offered for 1,000,000 such automobiles.

Between scooters and motorcycles, electric scooters have witnessed the higher sales till now because they are cheaper and easily available. However, electric scooters have range and speed issues, which is why the demand for electric motorcycles is increasing fast. Automakers have begun introducing new electric motorcycle models with better batteries and more-powerful motors, so the issue of driving range and speed can be remedied. Plus, with their sleeker look, motorcycles appeal more to the youth compared to scooters.

Presently, the combined sales of all types of electric two-wheelers are the highest in Asia-Pacific (APAC), as it is home to some of the most-polluted countries in the world, specifically China and India. Moreover, being the largest auto markets on earth, these countries are witnessing a burgeoning demand for all types of EVs. Another reason for the dominance of APAC on the global electric scooter and motorcycle market is the presence of a large number of organized and unorganized automakers and manufacturers of EV components, such as motors, battery packs, wires, controllers, and battery management systems.

Hence, with the growing environmental concerns and sustained government support, the adoption of electric two-wheelers will keep increasing around the world.