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Is India Buckled Up For EV 2 Wheeler’s Boom?

Nearly 2.34 lacs electric two-wheelers were sold during 2021 in India. 2021 has recorded double the sales of last year. It is expected to grow over 6 times in 2022. Many new entrants like Ola Electric, Simple Energy, Bounce Infinity, Tork Motors, and Ultraviolette have made a good investment in this business built and expanded production capabilities. Further, the fact that traditional 2-wheeler segment sales in 2021 have shown degrowth over the last year also gives more credibility to the news of a shift in customer preference towards¬†electricalvehicles. Here is a list of factors that support the view of EV 2-wheeler\’s boom:

Government Incentive

The FAME 2 (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) policy incentivizes vehicles based on their battery capacity. This helps to narrow the price gap between low and high-speed E-scooters and boost the sales of high-speed E-scooters in the country. Some states offer benefits like exemption from road tax and registration charges and an incentive of Rs 5,000 per kWh of battery capacity with capping. Further, the Government has made incentives provisions for setting up necessary EV infrastructure for the automobile manufacturers to shift their focus from traditional scooters. All this motivates consumer sales of E-scooters, which were earlier avoided due to high pricing with a lack of supporting infrastructure.

Sales And Marketing

EV manufacturers are using many different marketing techniques. For instance, the application of direct-to-consumer sales by Ola Electric has changed; they have a traditional dealership model in the distribution chain for product promotion. This lowers customers\’ overall cost and thus improves sales as well. Further, product differentiation is also being marketed primarily.

Investments In EV Space

Electric two-wheeler is just 1% of the conventional two-wheeler market. However, this sector\’s growth has caught the attention of investors, and they have committed to placing their bet of Rs 10,000 Cr on EV\’s two-wheeler business.

With consumers being more aware of the industry, things are working on providing better charging infrastructure/ range. The Government is doing its bit with the FAME 2 scheme; the future¬†looks bright for the 2W EV Auto Industry. There are challenges, but the rising petrol prices and millennials\’ mindset will pull this sector.

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