More public charging stations will help ease the concerns of potential electric vehicle (EV) buyers regarding range limitations, boost demand and encourage electric two-wheeler makers, including Ola Electric, Ather Energy and TVS Motor Company, to ramp up capacity.
Last fiscal, EVs accounted for 4.5% of the nearly 15.86 million two-wheelers (motorcycles, scooters and mopeds) sold in the country.
Mehta, who is also Bengaluru-headquartered Ather Energy’s CEO, said sales of electric two-wheelers started gaining momentum last month, after declining sequentially in June when manufacturers had raised prices on account of the reduction in incentives under FAME II (faster adoption and manufacturing of electric vehicles).
Data available with Federation of Automobile Dealers Association (FADA) shows that 54,292 electric two-wheelers were sold in July compared with 45,806 units retailed in the previous month.“The market has already started picking up and recovered by 20% in July. On a run rate basis, it (penetration of electric powertrain in two-wheeler sales) should cross 10% early next year and 20% by early 2025, led by scooters,” Mehta said, adding that motorcycles will take some more time to transition to electric.Meanwhile, the share of electric in the scooter segment is expected to double to about 30% by the end of the current fiscal.Ather, which last week launched its most affordable scooter, 450S, with a starting price of Rs 110,054 in Ahmedabad (ex-showroom price inclusive of FAME II & state subsidy), will plan for fresh capacity next year to meet consumer demand, according to Mehta. The CEO declined to share the company‘s sales target for the year, but said he is “bullish” regarding growth prospects.
“We will look at fresh capacity next year,” Mehta said. “While tier-I demand has been what we estimated, tier-II and III demand have been much higher. Average tier-II sales per store is higher than several tier-I stores.”
Ather has two manufacturing units in Tamil Nadu with a total installed capacity of 420,000 units.
Meanwhile, Bengaluru-headquartered Ola Electric is in the process of ramping up capacity to 2 million units per annum by the end of the ongoing calendar year, from 0.5 million now.
Ankush Aggarwal, chief business officer of Ola Electric, said the company received more than 50,000 bookings for the S1 Air within five days of launch, prompting it to fast-track expansion plans.
“We are seeing very strong demand in the market. We are seeing demand from across the country. In some markets like Maharashtra and Kerala, nearly half the scooters sold today are electric,” Aggarwal said. “Given the economic sense electric vehicles make, penetration will surely accelerate.”
Chennai-based TVS Motor Company, too, is doubling manufacturing capacity for the iQube on the back of a healthy order backlog for the product. Its chief executive, KN Radhakrishnan, recently said in a post earnings call that while there are short-term challenges in EV penetration due to the reduction in FAME incentives, in the medium to long term, industry will continue to grow.
“We are ramping up iQube production, and we are confident of reaching the 25,000 mark in the month of August. Booking continues to be healthy for TVS iQube,” he said. “We are expanding the availability of TVS iQube in India.”
He said the company is working to nearly double the number of touch points to 600 by the end of this year, from 309 touch points at present.
Sales of electric two-wheelers are expected to surpass 1.5 million units in FY24, CareEdge Ratings said in its note on June 5.
Although demand for EVs might experience a slowdown due to the reduction in the FAME II subsidy, the ratings agency said improvements in the EV ecosystem, including the availability of charging stations and advancements in battery capacity will facilitate the transition to electric two-wheelers.
