INDUSTRY

Electric two- and three-wheelers to outpace growth of other EVs in India by 2025

Volume of electric two- and three-wheelers is expected to account for 8 to 10 per cent and 30 per cent of new vehicle sales in the country by 2025 respectively, owing to low operating cost and attractive subsidy support, among others, ICRA has said. Penetration levels in cars and trucks, however, are likely to remain low in the medium term, the rating agency has added. 


Globally, electric vehicles (EVs) accounted for 4.4 per cent of new car sales during CY2020, and their share is likely to cross 5 per cent level this calendar year, ICRA has said. Electric two-wheeler and three-wheeler segments have relatively lower dependency on commercial charging infrastructure, owing to limited span of commute and can also adopt battery swapping to allay charging related concern for commercial applications. 


Furthermore, operating cost metrics continue to favour electric two-and three-wheelers for commercial operations. In fact, life of electric three-wheelers will be much more cost economical than their CNG counterparts, ICRA has said. India can capitalise on its vast two- and three-wheeler segments to emerge as leading manufacturer of electric two- and three-wheelers globally. However, it will continue to lag in electric car segment, ICRA has noted. 


While global automotive demand declined during CY2020 due to COVID-19-related impact, EVs remained the bright spot with approximately 40 per cent growth over the previous years. ICRA has added that it believes that while the transition to EVs is inevitable, the pace of penetration will be relatively gradual in India unlike global markets, like China, Europe and the US.

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