The Two Wheeler EV Rise in India: A Comparative Analysis of Industry Giants vs Startups
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The Indian two-wheeler Electric Vehicle (EV) market has seen a recent surge in demand, and with the introduction of new technologies, a growing number of industry giants and startup companies are vying to capture the lion’s share of this lucrative and evolving sector. In this comparative analysis, we will look at the key differences between the established industry giants and the new wave of startups, and assess how they are positioning themselves in the two-wheeler EV market. We’ll explore the opportunities and challenges that both the giants and startups face in the industry, the strategies they are using to capitalize on the growth in the market, and the impacts of their strategies on the customer experience. By breaking down the advantages and disadvantages of both sides, we can gain a better understanding of the current state of the two-wheeler EV market, and the potential future of this dynamic and rapidly growing sector.
Overview of the two-wheeler EV market in India
The Indian two-wheeler market is dominated by the scooter segment, with two-wheelers accounting for around 80% of all vehicles sold in the country. While two-wheelers have been an essential part of Indian life for decades, the recent growth in electric two-wheelers has been spurred primarily by government regulations and environmental concerns. The increasing price of fuel and emissions from two-wheelers have led to the implementation of strict laws governing the sale of two-wheelers in the country. Two-wheelers are expected to become completely extinct by 2030, with hybrids, EVs, and fuel cells being the preferred options. This regulation has led to a rise in the demand for electric two-wheelers, and the industry is expected to grow at a CAGR of around 50% in the coming years. While most companies are currently focusing on scooters, future market growth is expected to come primarily from motorcycles and scooters with an engine displacement of 50cc or less. In addition to the high demand for electric two-wheelers, the growth in the market has been further bolstered by the increasing number of players in the industry. The number of companies manufacturing two-wheelers in the country has increased in recent years, which is expected to lead to lower production costs for consumers and a greater variety of products to choose from.
Key differences between industry giants and startups
The two-wheeler EV market is a highly competitive field with a number of industry giants dominating the market. Companies such as Hero Cycles, Honda, Bajaj Auto, and TVS Motors are household names when it comes to two-wheelers in India, and have been in the industry for decades. On the other hand, startups have recently started to eat into the market share of the established giants, and are offering some unique and customer-centric products. One of the key differences between these two groups of companies is the funding sources behind their operations. While startups have been able to capitalize on the increasing popularity of crowdfunding to procure funds, most industry giants have limited access to external funding sources. This is primarily due to the lack of transparency in their business models and a general reluctance on the part of financial institutions to lend money to legacy industries. In addition to the funding sources, startups are also known to be highly agile and nimble, with smaller teams and simplified operations leading to greater agility and speed.
Opportunities and challenges for both industry giants and startups
While both industry giants and startups have benefited from the rise in the demand for electric two-wheelers, the Indian market is expected to reach its full potential over the next few years. The ongoing growth in demand for electric two-wheelers is expected to slow down in the coming years, which is likely to result in a stagnation of the two-wheeler EV market in the short term. When looking at the short-term opportunities in the two-wheeler EV market, it becomes clear that the two-wheeler is the ideal vehicle for adoption of electric technology. While EVs for larger vehicles are expected to see increased adoption, the two-wheeler is the prime candidate due to its high usage, low cost of adoption, and ability to extend the range of EVs. Additionally, rise in disposable incomes, government regulations, and increasing awareness have all led to a rise in the demand for electric two-wheelers in India. However, as the market matures, industry giants and startups are facing new challenges that are expected to impact the growth of the market in the coming years. Since the current demand is primarily driven by government regulations and the need to comply with the deadlines imposed by the government, a drop in the demand may occur once the deadlines are met.
Strategies used by industry giants and startups
In order to capture the lion’s share of the growing two-wheeler EV market and gain an advantage over their competition, industry giants and startups have been coming up with innovative and customer-centric strategies to stay ahead of the game. While industry giants such as Hero Cycles and Bajaj Auto have been focused primarily on the production of scooters, startups like Energies are going a step further and are offering motorcycles with higher acceleration, longer range, and higher top speeds. The strategy that has been gaining popularity among startups is the retrofit kit that is retrofitted into two-wheelers that are already on the road and in circulation. This enables a greater number of customers to adopt electric two-wheelers, while also significantly reducing the costs associated with manufacturing entirely new products.
Impacts of strategies on customer experience
The adoption of these strategies by both industry giants and startups is expected to lead to a better customer experience as a whole. With the increasing popularity of electric two-wheelers, the battery life is expected to improve, and charging stations are expected to become more common. Customers are set to benefit from reduced pollution and CO2 emissions, and a quieter, smoother ride. Additionally, the adoption of electric two-wheelers is expected to result in reduced fuel costs, a decrease in CO2 emissions, and a decrease in noise pollution. The rising popularity of electric two-wheelers is expected to lead to a greater number of charging stations, which should ease the process of charging and extend the range of electric two-wheelers. With the increased availability of charging stations, customers are expected to spend less time charging their vehicles and more time enjoying their ride.
Current state of two-wheeler EV market
The current state of the two-wheeler EV market in India is one of opportunity, with both industry giants and startups expected to capture sizeable shares of the market over the next few years. With the rising demand for electric two-wheelers and the expected fall in the prices of automobiles, electric scooters and motorcycles are expected to become more affordable, with the average price expected to drop from approximately INR 150,000 to INR 50,000 by 2025. This shift in the overall price of two-wheelers is expected to be seen across the board, with both hybrids and EVs expected to see a significant decrease in price over the next few years. The increased adoption of EVs is expected to reduce CO2 emissions, and the increased use of renewable energy sources is expected to reduce the dependency on fossil fuels.
Potential future of two-wheeler EV market
While the current state of the two-wheeler EV market in India is one of opportunity, the future is expected to be one of growth and expansion. The increasing adoption of electric two-wheelers is expected to drastically reduce the cost of owning and operating a two-wheeler, while also leading to a reduction in CO2 emissions and overall pollution in Indian cities. With the rise in the adoption of electric two-wheelers, charging stations are expected to become more common, and the process of charging is expected to become easier and less time-consuming. The increased availability of charging stations is expected to make it easier for customers to charge their vehicles, and is expected to result in a greater number of electric two-wheelers on the road.
Advantages and disadvantages of both sides
The two-wheeler EV market is expected to reach a valuation of INR 20,000 Cr by 2025, and will be driven by the rising demand for electric two-wheelers and the increasing adoption of EVs. With the market expected to grow over the next few years, industry giants and startups are vying to capture the lion’s share of the market. When looking at the advantages and disadvantages of the two sides, it becomes clear that both groups of companies have their own set of strengths and weaknesses. Industry giants such as Hero Cycles, Bajaj Auto, and TVS
