Mint Primer: Are two-wheelers shifting gears toward an electric future?
Mint explains why. In 2018-19, two-wheeler sales hit a peak of nearly 21.18 million units, registering a 6% growth during the year. Thereafter, sales fell for three consecutive years to hit a decadal low of less than 13.6 million units in 2021-22.
As the economy rebounded from the impact of the pandemic, sales grew to 15.86 million units last year and are tipped to cross 17 million units this year. Nonetheless, the figure would still be 20% less than the peak achieved in 2018-19. In contrast, the passenger vehicle segment has already surpassed pre-covid levels.
Commercial vehicles and three-wheelers are likely to do the same this fiscal. High inflation, stagnant wages, rising joblessness and soaring petrol prices have all been speed breakers. Also, regulatory changes starting with BS-VI emission norms in 2020 and stricter safety standards have impacted every sub-segment as prices shot up: The price of India’s largest seller, Honda Activa, is up from ₹52,000 in 2016 to ₹88,000 in 2023.
The K-shaped recovery in the overall economy means that while demand for premium bikes such as Royal Enfield is surging, entry level motorcycles (100-125cc), which still command over half of the industry volumes, are in a protracted slump. Subsidies and more players mean electric two-wheeler sales could top 0.8 million units per annum. Still, it would be just 5% of the overall sales.
The paucity of electric motorcycles hampers EV penetration, but in the scooter segment, it has started to impact its petrol counterparts. By March 2024, electric scooters are expected to account for over 15% of monthly sales. To comply with BS-VI norms, the industry had to spend significantly to introduce fuel injection systems.
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