The recent incidents of fires in electric two-wheelers have raised consumer concerns about owning one such vehicle, but it has not affected the demand significantly.
True, part of Electric Two-Wheeler (2W) in the 2W segment fell to 3.2% in May from 4.1% in April, but it has jumped to 3.5% so far in June, according to Vehicle Registration. One factor that could have slowed this penetration could have been supply chain disruptions.
Analysts at Jefferies India said in a report on June 22, “Conversations on our electric vehicle (EV) tour in June show that there has been an increase in customer queries on safety as a result of fire incidents, but a greater impact on demand.” Hasn’t fallen.”
The new entrants hold a significant market share in this segment, while the existing ones are yet to expand their presence. For perspective, Ola Electric, Ampere and Okinawa had a market share of 23%, 14% and 22% respectively in the June quarter (Q1FY23). On the other hand, Bajaj Auto and TVS Motor Company had a market share of 3.5% and 2.4% respectively in the same period.
Also, there is no dearth of funds for e-2W startups. Analysts at Jefferies estimate that the new e-2W has raised about $1.7 billion in total capital so far, with Ola Electric, Ather Energy and Ampere holding about 75% of the capital.
“We believe that access to capital is critical to expanding capacity and product portfolios for new original equipment manufacturers, but funding will likely be concentrated at some of the leading OEMs with a high capital market focus on vehicle safety and in-house capabilities. Is.” Jefferies reports.
The electric three-wheeler (e-3W) segment is also witnessing a boom and the government’s push for electrification will further help the demand.
The Jefferies report states, “Our conversations with MoEVing, an EV ecosystem startup for intra-city logistics, show that total cost of ownership (TCO) is becoming attractive for e-3W over internal combustion engines. ” Assuming an eight-year vehicle, MoEVing estimates that the TCO of an e-3W including subsidy benefits is about 42% and 25% lower than that of diesel and CNG (compressed natural gas) three-wheelers, respectively.
Note that the listed automakers are yet to have the e-3W product and Bajaj Auto and TVS are gearing up to launch it.
As such, it remains to be seen whether the incumbents capture the market share with their respective EVs. More importantly, the product quality will be closely monitored.