Electric 2-wheelers To Account For 8-10 Percent Vehicle Sales By 2025, 3-wheelers To Make 30 Percent: ICRA 

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India can capitalize on its vast 2W and 3W segment, to emerge as a leading manufacturer of e2W and e3W, globally. However, it will continue to lag in the electric car segment

IOT e-scooter (pic credit: Zigwheels)

The electric two and three-wheelers volumes are expected to account for 8-10 per cent and 30 per cent of new vehicle sales in India by 2025, respectively, as per rating agency ICRA. This would be led by the low operating cost and attractive subsidy support, among others.

As per ICRA, electric two-wheeler (e2W) and three-wheeler (e3W) segments have a relatively lower dependency on commercial charging infrastructure, owing to a limited span of commute and can also adopt battery swapping to allay charging-related concern for commercial applications.

Furthermore, operating cost metrics for electric 2W and 3W continue to be efficient for commercial operations. In fact, the e3W over the life of the vehicle will be much more cost economical than its CNG counterparts.

India can capitalize on its vast 2W and 3W segment, to emerge as a leading manufacturer of e2W and e3W, globally. However, it will continue to lag in the electric car segment, ICRA noted.

“Affordability and range anxiety remain key challenges, especially in the passenger car and truck segment and penetration levels are likely to remain low over the medium term,” explained Shamsher Dewan, Vice President and Group Head – Corporate Sector Ratings, ICRA. 

The absence of a local supplier ecosystem and high dependency on imports make things tougher. 

“We expect the share of EVs to reach about 8-10 per cent level in 2W, and over 30 per cent in 3W by 2025. The penetration levels in cars and trucks are likely to remain low in the medium term,” Dewan noted.

Unlike other markets, especially China, which has taken a significant lead in public charging infrastructure, India may take several years to reach that level of charging infrastructure penetration, ICRA said, adding that India could focus on 2W, 3W, and buses where the requirement of public charging infrastructure is limited.

Even as China has a massive lead in the e-car segment, ICRA said it believes that India can still work on electrifying its 2W and 3W segment due to favorable TCO and huge volume which translates into economies of scale benefits.

“The development of local manufacturing of batteries, critical components and charging infrastructure would remain critical for incentivizing the local EV ecosystem, which is currently weak, reducing costs and improving the overall acceptability of EVs in the country”, said Dewan.

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