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Indian Electric 2-Wheeler Market Grows Despite COVID-19 Pandemic

By Anna Mowat and Peter du Pont

Through our work with the Private Financing Advisory Network (PFAN), we are seeing significant developments in the market for electric 2-wheelers (E2Ws) across Asia. With PFAN’s rolling call for proposals, we have been providing ongoing coaching for several E2W companies and solution partners across the region, and in particular two in India, two in Vietnam and three in the Philippines. We previously explored the two Vietnamese companies as well as different E2W business models in the Asian market in our former blog post. Despite the pandemic, 2020 was a strong year for electric vehicles in the Indian market.

At the beginning of 2020, before COVID-19 emerged, the Indian government launched Phase 2 of its Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme, with an outlay of 10,000-crore (~USD 1.37billion). As of February 4, 2021 , 96 Hybrid models are approved, 47,920 vehicles have been sold, and 148.01-crore (~USD 20.3 million) has been provided under FAME-II. This amounts to roughly 91,855 Kg of CO2 saved each day. For the most up-to-date numbers from the FAME II Scheme, click on the image below.

Despite the initial COVID-19 lockdown, the E2W sales in 2020 of 152,000 vehicles beat 2019 sales of 126,000 vehicles. In comparison with internal combustion engine (ICE), 152,000 E2Ws is roughly 0.9% of the Indian market for ICE 2-wheelers. This increase may have been helped by FAME-II which provides a 20,000-rupee subsidy per E2W vehicle.

In addition to a rise in E2W sales, Ola Electric made the shift from just being a cab aggregator app to announcing a plan to invest 1,400 crore (~USD 330 million) in a new electric scooter manufacturing plant in India. Its current biggest competitors in the Indian E2W manufacturing market are Hero MotoCorp, TVS Motor, and Bajaj Auto. The 2020 financial year also saw TVS Motors invest another 30 crore in Ultraviolette Automotive.

With nearly two dozen new E2W launches this financial year, the “City Speed” segment, vehicles that run from 40-50 mph, has emerged as a strong growth area. Previously only accounting for 7-8% of sales, it is expected to rise to around 15-20% of sales over the next few years.

The FAME-II scheme has been a win for the E2W market in India, but there is one stipulation to be aware of. The current subsidy criteria state that the vehicles must have a range of 80 km, however most E2W vehicles have a range of around just 60 km. The cost difference between a vehicle with an 80 km and a 60km range is roughly 15,000 rupees (only 5,000 rupees less that the final price of the subsidy). Market data suggest that 90% of customers are satisfied with the 60 km range, so removal of the range restriction could be a force multiplier for the E2W industry.

Growth in the Indian electric two-wheeler market in the face of the COVID-19 pandemic is promising for the future of the industry. As the new manufacturing plants come online and FAME-II continues to support the Indian market, the industry is likely to continue growing. The Indian E2W industry shows huge potential and we will be watching it.

Photo credit: ET Au

Note: This article is largely drawn from the Business Standard article, “Two-wheeler EVs feel the spark.” See reference 3 for more information.

Anna Mowat is a Research Assistant and Peter du Pont is a Managing Partner of Asia Clean Energy Partners.



1. National Automotive Board (NAB), Ministry of Heavy Industries & Public Enterprises, Government of India. About FAME II. Department of Heavy Industries. (accessed 13 Jan 2021)

2. Sanchita Dash (14 Dec 2020). Ola will become a two-wheeler maker with a new electric scooter plant in Tamil Nadu where it is investing 2,400 crore. Business Insider India. (accessed 13 Jan 2021)

3. T E Narasimhan (1 Jan 2021). Two-wheeler EVs feel the spark. Business Standard. Print.

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