According to a new report electric two-wheeler (ETW) market size in terms of sales is set to cross 20 lakh units in India in the next five years.
The current share of sales in financial year 2019-20 (FY20) was 0.7 per cent. It added that the expected share of ETWs in total two-wheeler sales in the next five years could vary from 6 per cent to 15 per cent.
The market for high-speed ETWs is predicted to grow by five times against the three-fold growth for low-speed ETWs in the next five years, said the survey by JMK Research & Analytics.
According to FAME-II guidelines, only those ETWs with speed higher than 40 kmph are eligible for incentives, one of the reasons for higher growth prospects for high-speed electric two-wheelers.
“Rising consumer awareness, strong government push and falling battery prices would favour a robust growth outlook for the ETW market… Battery prices are expected to be below $100 per kWh before 2024, which is the key factor driving electric vehicle (EV) market growth,” the survey report added.
The survey report said that CXOs expect two to three times growth in their businesses next year, despite supply chain disruption in the EV sector due to COVID-19.
However, there are a few roadblocks for the ETW industry such as high upfront costs, government incentives linked to components localization, import dependency for battery, and inadequate charging infrastructure.
The report added that government subsidy is highly crucial for the next five years. Alongwith introduction of direct subsidies for local manufacturing of components and consumer awareness programmes.