The electric vehicle (EV) market in India had a stellar 2021 with sales more than doubling over the previous year. Amidst a very bullish outlook for 2022, Hero Electric, the country’s leader in the electric two-wheeler segment, and the Mahindra Group, a dominant presence in the country’s electric three- and four-wheeler segment, have come together for a five-year strategic partnership.
The collaboration will enable Hero to boost manufacturing capacity — the goal is to produce over one million EVs per year in 2022 — to meet surging demand for electric two-wheelers and facilitate the Mahindra Group’s bid to fast-track the development of electric offerings under its Peugeot Motorcycles brand via a platform sharing approach.
The development of a joint platform approach will, meanwhile, accelerate Mahindra’s electrification agenda for its Peugeot Motorcycles portfolio in Europe. Both companies have stated that they expect the partnership to yield mutual benefits in terms of cost, resource, time and knowledge optimization, and strengthened supply networks.
To learn more about the fast-evolving two-wheeler market in India, please access our research reports – India Electric Two-wheeler Growth Opportunities, India Two-Wheeler Growth Opportunities, and Profiles of Key Electric Vehicle (EV) Manufacturers Making an Impact on the Indian Market, or contact [email protected] for information on a private briefing.
Our Perspective
Our “Global Two-wheeler Outlook, 2021” study was accompanied by the caption: “Strategic Partnering to Boost Two-wheeler Growth after COVID-19.” While highlighting the key trends that would define 2021 with spillover effects into 2022, we forecasted that electric two-wheeler sales would gain momentum on the back of continued OEM investments in new product development, R&D, collaborations/overseas partnerships, and expanding sales networks. We also identified improved government initiatives for electrification and incentives offered to OEMs and customers as critical growth drivers.
In 2021, total registered EV sales in India more than doubled compared to the previous year, breaching the three lakh mark and representing the highest ever annual volumes. The high-speed electric two-wheeler segment, in particular, registered over 425% growth in 2021.
Today, EV volumes in India continue to be powered by the two-wheeler segment. Rising fuel prices, greater consumer awareness about the environmental and economic benefits of using green mobility modes, and improved charging infrastructure, are set to positively impact the adoption of electric two-wheelers in the country.
As this happens, allied domains like vehicle connectivity are coming to the fore. Late last month, Borqs Technologies Inc. announced that it would be working with leading chipset vendors to develop and sell products – in-vehicle-infotainment (IVI) and Telematics Control Unit (TCUs), among them – targeting the electric two-and three-wheeler segment in India and Southeast Asia.
“Government support in the form of modifications to FAME II will be a major growth catalyst. For instance, purchase incentives for electric two-wheelers will be hiked by 50% from ₹10,000 to ₹15,000 per kWh of battery capacity. This proactively addresses the challenge of high upfront costs. In a virtuous cycle, we expect increased production and demand to drive greater penetration of the electric two-wheelers in the country, which currently stands at only around 6-8%. In other words, the opportunity for further penetration is tremendous.” – Anjan Hemanth Kumar, Research Director, Powertrain and Electric Vehicles, Mobility Practice, Frost & Sullivan.
The Hero-Mahindra tie-up supports both manufacturing capacity expansion and accelerated product development. It optimally positions the partners to address surging demand that is expected to come both from a personal and commercial mobility perspective. The electric motorcycle segment in India is another core area of opportunity for the partners.
In 2021, sales of electric motorcycles comprised a meager 3% of total registered electric two-wheeler sales. Comparatively, ICE motorcycle sales share stood at approximately 75% during the same period, which underscores the huge growth potential of the electric motorcycles segment in India. To fill the gap of indigenous electric motorcycle models in the market, homegrown electric motorcycle startups such as Ultraviolette Automotive, Tork Motors, and Raptee Energy are preparing to roll out their first products off the production line. With this India’s electric motorcycle segment is expected to gain massive traction in 2022.
If 2021 was big, trends indicate that 2022 could be an even bigger and better year for electric two-wheelers in India, with improving government incentives, battery swapping system, the emergence of new business models, and inter-industry convergences. It’s going to be an electric year ahead.
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