The study said that the reduction in prices of the electric two wheelers is largely due to the fall in prices of lithium-ion batteries, which would plummet further as indigenization takes place
With the much-hyped growth of electric vheiles being marred by the price difference from the ICE equivalents, a new study by International Council on Clean Transportation (ICCT) estimates that electric two wheelers in India could likely reach price parity with their petrol counterparts by 2027.
For the study, ICCT has compared electric motorcycles and scooters with different battery sizes and varying ranges, concluding that an electric motorcycle with a 100 kilometer range would achieve cost parity with a similar petrol powered bike by 2027.
It added that it would take another 3 years for a 150 kilometer range model while for the top of the line 250 kilometer model, parity would be achieved only by 2034.
In the case of electric scooters, a 75 kilometer range electric scooter is expected to achieve parity with its petrol counterpart by 2028. On the other hand, 125 and 200 kilometer versions would match prices its ICE equivalent by 2031 and 2034 respectively.
The study said that the reduction in prices of the electric two-wheelers is largely due to the fall in prices of lithium-ion batteries, which would plummet further as indigenization takes place.
ICCT has estimated a fall of nearly 55 percent in the cost of battery between 2020 and 2030. It is also subject to the current incentives on offer under FAME 2 being continued beyond 2024.
“There are usual caveats but the technology around batteries is fast evolving so it is difficult to say what the situation would be even 5 years from now,” says Dr Anup Bandivadekar, co-author of the study and the program lead for passenger vehicles at ICCT.
“The rates of battery capacity fabrication could increase with innovations in chemistry and manufacturing. There is a good chance we have infact underestimated future cost reductions and our projections may be conservative,” he said.
The year in which the upfront prices of electric two-wheelers match conventional 2W prices is not the same as the year in which the total costs to own and operate the vehicles match.
Total cost of ownership parity occurs much earlier for electric two-wheelers, and they are a far more cost-effective option over 5 and 10 years of ownership than gasoline 2Ws well before 2030.
“Fuel price is a big determinant here for conventional two-wheelers. We have taken the petrol price at Rs 83 per litre which as you know is very conservative compared to today,” Bandivadekar said.