BCG: OEMs Should Customize E2Ws To Meet Consumer Demand


The Boston Consulting Group released a report called “Surging Ahead: How Electric Two-Wheelers Are Rapidly Gaining Popularity with the Diverse Indian Consumer.” This report explores the consumer dynamics within India’s electric two-wheeler market, highlighting the factors that encourage and impede the adoption of electric two-wheelers.

In India, the popularity of electric two-wheelers has seen a remarkable surge, with their adoption rates more than doubling over the past two years, and they are expected to continue growing at a rapid pace. A recent study by the Boston Consulting Group (BCG) emphasizes the necessity for vehicles in the electric two-wheeler market to be deeply customized to address the varied preferences of different consumer segments. The report, titled “Surging Ahead: How electric two-wheelers are rapidly gaining popularity with the Diverse Indian Consumer,” delves into the current landscape of consumer behaviours in the electric two-wheeler market in India, pinpointing both the drivers and obstacles to adoption and outlines essential strategies for Original Equipment Manufacturers (OEMs) to create value. 

According to BCG’s findings, the electric two-wheeler market caters to a wide range of demands, from consumers seeking basic transportation to those who prioritize high performance and aesthetics and even those looking to earn a living from such vehicles. The report stresses the importance of OEMs grasping the diversity within consumer demands and strategically targeting and tailoring their product offerings and marketing to align with these specific demands.

Natarajan Sankar, BCG Managing Director and Partner highlights that achieving success in the electric two-wheeler (E2W) sector requires a clear, nuanced understanding of customer needs and acknowledges the inherent trade-offs between meeting the needs of specific segments and the breadth of product offerings. This challenge, he notes, is more pronounced in the E2W sector than in the market for internal combustion engine (ICE) two-wheelers.

The rate of electric two-wheeler adoption in India has risen sharply, from 1.9 per cent in the 2021-22 period to 5.4 per cent in 2023-24. To gain insights into consumer preferences, BCG surveyed 2,750 individuals across various demographics and mobility contexts, revealing that 30 per cent are actively considering electric options for their next two-wheeler purchase.

Government subsidies have played a significant role in boosting electric two-wheeler sales by reducing the upfront costs, though some manufacturers argue that these subsidies are disproportionately allocated towards specific categories, thereby neglecting other potential uses for electric scooters.

The BCG report concludes that it is crucial for OEMs to develop a strategic approach to product development and positioning that specifically addresses the diverse needs of their target markets. This involves not only focusing on product customization but also innovating in pricing and ownership alternatives, building adequate charging or battery-swapping networks, and reevaluating their service network strategies to meet the evolving demands of the electric two-wheeler consumer base.


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