The e-bike market in India has been growing steadily over the past few years amid growing awareness of the environmental benefits of electric vehicles and rising petrol prices. According to a market analysis report by Motor Intelligence, the Indian electric bike market is expected to grow at a CAGR of 9.94%. A report by ET Auto shows that the electric two-wheeler industry has ambitious plans to increase production capacity to over 30 million units by 2026, with annual sales rising 50% from India’s highest annual two-wheeler sales of this moment. However, if this target is achieved, even in an optimistic scenario where all two-wheelers sold by 2030 are electric, it could lead to an oversupply of electric vehicles. At the same time, the Indian e-bike market is facing serious challenges despite strong pressure from the government. In this article, we will discuss the challenges facing the Indian e-bike market and future directions.
One of the biggest challenges facing the Indian e-bike market is the lack of charging infrastructure. Unlike gas stations, charging stations have not become widespread throughout the country. This means e-bike owners have limited charging options for their vehicles. According to a legal report by IVCA-EY-Indu, there are a total of 1,742 charging stations in India. In addition to infrastructure issues, electric bikes take longer to charge than gasoline cars, which can be a deterrent to potential buyers.
To address this issue, the Government of India has launched the FAME (Fast Adoption and Manufacturing of (Hybrid and) Electric Vehicles) initiative to create a robust charging infrastructure across the country. The program provides financial incentives for individuals and organizations to purchase electric vehicles and install charging stations.
Another challenge facing the Indian e-bike market is the higher cost of e-bikes compared to petrol bikes. Although the running costs of e-bikes are lower than gas bikes, the initial cost of purchasing an e-bike is much higher. This may act as a deterrent to potential buyers, especially in a price-sensitive market like India.
To address this issue, the Indian government has launched several initiatives, including the FAME scheme and Goods and Services Tax (GST) exemption for electric vehicles, to make e-bikes more accessible to the general public. Finance Minister Nirmala Sitharaman also made several important announcements for the Indian automobile and growing electric vehicle industry during the Budget 2023 announcement on February 1, 2023. The main content is improving green mobility and promoting the production of hydrogen and biogas. The mobility provisions also apply to duty-free imports of electric vehicle batteries.
The Finance Minister announced that the Government of India is taking steps to promote the use of cleaner modes of transport. One measure is a tax exemption for capital goods and equipment needed to produce lithium-ion cells used in electric vehicle (EV) batteries. The move is intended to encourage the adoption of cleaner alternative modes of transport. In addition, tariffs on lithium-ion batteries were reduced from 21% to 13%, excluding textiles and agricultural products. These actions are expected to accelerate the growth of the electric vehicle industry in India and support the country’s transition to a low-carbon economy. This will further increase the popularity of electric vehicles in the country. Additionally, some e-bike manufacturers are also starting to offer financing options to make their products more affordable for customers.
Another challenge facing the Indian e-bike market is the limited range of e-bikes. Most electric bikes currently on the market have a range of around 60-70 kilometers on a single charge, which may not be enough for long-distance trips. This can be a deterrent to potential buyers, especially those who use the bike for their daily commute.
Although the limited supply of e-bikes is one of the challenges facing the adoption of electric vehicles, several initiatives are currently underway to address this issue. Developments in fast charging infrastructure, advances in battery technology and regenerative braking systems will play a vital role in increasing the range of e-bikes and accelerating their adoption. Moreover, the Government of India can also provide incentives for R&D in this area to encourage innovation.
Another challenge facing the Indian e-bike market is the lack of consumer awareness about the benefits of e-bikes. Despite growing awareness of the environmental benefits of electric vehicles, many consumers are still unaware of the cost savings and other benefits of e-bikes.
According to a YouGov survey, only 31% of Indians are aware of e-bikes. Lack of awareness makes it difficult for companies to promote their products and attract potential customers.
To address this issue, the Indian government can launch awareness campaigns to educate consumers about the benefits of e-bikes. E-bike manufacturers can also play a role by providing more information about their products and their benefits.
The challenges facing the Indian e-bike market are enormous, but the industry also has enormous potential for growth. With the right policies and initiatives, India can become a leader in the global e-bike market. The Government of India, e-bike manufacturers and other stakeholders must work together to resolve the issues and pave the way for a bright future for e-bikes in India. This is why, to address the above challenges, the government in the Budget 2023 announcement highlighted the Government of India’s commitment to promoting clean mobility and sustainable energy solutions. Apart from capital goods tax incentives on electric vehicle batteries, the government has also allocated Rs 19,700 crore for the National Green Hydrogen Mission, which aims to achieve annual green hydrogen production of 5 million tonnes by 2030. This move will provide important support to the Indian electric vehicle industry to help India transition to a low-carbon economy and achieve its mission of net-zero emissions by 2070. Additionally, Gobardhan plans to invest Rs 10,000 crore to support the growth of biogas production, which includes setting up 200 compressed biogas plants and 300 cluster plants. The implementation of these measures is expected to accelerate the adoption of cleaner modes of transport and help India prosper in the market electric vehicles.
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Post time: Jan-17-2024