Electric Two-Wheeler Market 2024: Rapid Growth Amid Key Challenges

Electric scooters and motorcycles crossed the 1 million sales milestone in 2024, with total sales reaching 1.14 million units—a strong 33% growth from CY2023 when 860,418 units were sold.

In September 2024, the Union Cabinet approved a $1.3 billion incentive scheme to boost EV adoption, aiming to reduce pollution and transition to cleaner fuels.

However, beneath this positive growth lies a concerning trend. The share of EVs in two-wheeler sales surged from just 0.4% in FY21 to 5.4% by Q1CY23, driven by subsidies and new vehicle launches. But for the past two years, it has remained stagnant in the 5.5-6.5% range.

A key reason for this plateau is the reduction in incentives starting June 2023, which led to higher retail prices.

Period	Incentive
E2W incentive – ₹5K/kWh Incentive cap: 15% of the ex-factory price up to a maximum of ₹10,000 / vehicle	E2W incentive – ₹10K/kWh Incentive cap: 20% of ex-factory price
June 2021	E2W incentive – ₹10K/kWh Incentive cap: 15% of ex-factory price
June 2023	E2W incentive – ₹5K/kWh Incentive cap: 15% of the ex-factory price up to a maximum of ₹10,000/vehicle
April 2024	E2W incentive – ₹5K/kWh Incentive cap: 15% of the ex-factory price up to a maximum of ₹10,000/vehicle

In response, OEMs have introduced lower-priced models—TVS iQube is now cheaper than TVS’s top-end scooters, and Ola scooters start at ~₹60,000, making them more affordable than many entry-level ICE options. While these price reductions improve the total cost of ownership from the first year itself, they alone haven’t been enough to drive widespread EV adoption.

The core challenge remains consumer hesitation. Most two-wheeler buyers belong to price-sensitive segments with little room for risk in their major purchases. Unlike ICE vehicles, EVs still lack a long-standing track record of reliability, durability, low maintenance costs, and strong resale value. Beyond competitive pricing, building consumer confidence in these factors will be critical for accelerating EV adoption.

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Naveen K R

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