Electric two-wheelers to fully penetrate Indian market by FY2026-27

Guwahati: A report issued by NITI Aayog in collaboration with TIFAC forecasts that electric two-wheelers will fully penetrate the Indian market by 2026–27.

According to the report, the road transport sector is undergoing a transformation, driven by concerns about climate change, environmental pollution, and energy security, with electric mobility promising to replace traditional fossil fuel-based transportation in the near future.
A prior estimate of the possible level of penetration of electric two-wheelers is extremely useful when determining policy imperatives for the desired future, planning for infrastructure, and ensuring an appropriate ecosystem, as per the report.

"A bottom-up analysis of how various policies and economic, market, and technological factors may influence consumer acceptance of electric vehicles is critical," it says.

Eight scenarios for analysing the future penetration of electric two-wheelers in the country have been developed using a tool developed by NITI Aayog and TIFAC. The adoption of electric vehicles will be heavily reliant on the presence of an appropriate ecosystem and policies.

In an optimistic scenario, the report predicts that electric two-wheelers will be fully integrated into the Indian market by FY 2026-27. The report predicts 72 percent penetration by 2031 in another scenario that is technology-driven and where current incentives are removed by 2024.

On the occasion of the report's recent launch, NITI Aayog CEO Amitabh Kant stated, "This report provides a much-needed tool to the industry, researchers, academicians, and policymakers to analyse and respond to various scenarios." It can be easily replicated in other segments as well, such as four-wheelers."

Challenged Diffusion, Performance Driven Low Battery Cost, Technology Driven, Incentive Driven, Battery Cost Challenged, Same Performance, and Optimistic are the eight scenarios considered.

The future scenarios are built around three major factors that influence the market penetration of electric two-wheelers: I demand incentives; (ii) battery costs; and (iii) vehicle performance in terms of range and power.

In terms of installed vehicle manufacturing capacity and available charging infrastructure, four broad constraint levels have also been identified for the eight scenarios: I complete constraint (where both vehicle production and charging infrastructure are constraints) (ii) production limitation (where only vehicle production is a constraint) (iii) charge limitation (where only the charging infrastructure is a constraint) (iv) there is no restriction.

The report sheds light on the necessary infrastructure, manufacturing capability, policies, and technology development priorities in the area.

Government agencies, industry, and academic/research institutions can use the scenarios to conduct evidence-based analyses of policies, market scenarios, and technology development strategies.