Electric two-wheeler adoption in India rising, 13% share expected by 2026-27: Jefferies report

Jefferies predicts electric two-wheeler market share in India to rise to 13% by 2026-27, despite recent fluctuations and incentives.

The adoption of electric two-wheeler vehicles in India is on a gradual rise and it is expected that their share will rise to upwards of 13% by 2026-27, investment banking company Jefferies asserted in a report.

In the financial year that ended in March 2024, the share of electric two-wheelers was at 5%. The share of EVs in two-wheeler sales rose from just 0.4% in 2020-21 to 5.4% by early 2023, led by rising subsidies and new launches.

However, Jefferies claimed that a subsequent reduction in incentives has resulted in the share remaining in the 4-7% range for most of the past 24 months, despite the introduction of lower-priced vehicles by manufacturers.

"We currently assume a share of E2Ws rising from 5% (0.9mn units) in FY24 to 7% /10% /13% (1.4mn/2.3mn/3.4mn units) in FY25E/FY26E/FY27E, although we now see a downside risk to these estimates in the context of the new scheme targeting just 2.5mn E2Ws over two years," Jefferies said in its report released earlier this week.

“Ola Electric, which has recently become a publicly listed company, has emerged as the dominant manufacturer in India’s electric two-wheelers market,” said Jefferies, noting that its market share rose from 21% in 2022-23 to 35% in 2023-24 and further to 49% in 1Q-2024-25.

However, as per the Jefferies report, Ola’s market share has subsequently fallen to 31% in August and just 29% in September (month-to-date). Bajaj, TVS, and Ather, on the other hand, have gained 5-9 percentage points each since June quarter, it said.

This week, the Union Cabinet has approved a scheme for the promotion of electric mobility in the country. The scheme has an outlay of ₹10,900 crore over two years. The Cabinet’s approval for the ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme’ was based on a proposal from the Ministry of Heavy Industries (MHI).