E-scooters ride on festive demand, Auto News, ET Auto
CHENNAI: Festival demand may be lacklustre for petrol scooters and motorcycles but electric two wheelers are kicking in some top gear sales sentiment. Top electric two-wheeler companies like Hero, Okinawa and Ampere are already seeing a 25-30% ‘festival surge’ as urban buyers opt for electric vehicles due to high fuel prices and affordability due to subsidies.
Auto analysts said petrol two-wheelers are suffering because they are dependent on rural markets, which are still recovering from the pandemic. In the top 10 cities both EVs and ICE (internal combustion engine) vehicles have grown as people opt for personal transport, but the top 10 cities are less than one-tenth of ICE sales while they are nearly 30% of EV sales.
“The electric two-wheeler space has observed 20% growth in the last six months due to increased awareness, government subsidies, and better infrastructure,” said Hero Electric MD Naveen Munjal. With the festive season around the corner, Hero Electric, he said, which sells an average of 10,000 units per month, is expecting a 25-30% rise in sales.
Okinawa Autotech has already seen a 30% increase in demand in October compared to last month, founder & MD Jeetender Sharma said. Ampere, the electric two-wheeler arm of Greaves Cotton, has clocked its best sales this year in August and September. In contrast, petrol two-wheeler sales were down 16% year-on-year in September with stocks at 45-60-day high. Hero MotoCorp, Bajaj and Royal Enfield sales were down 26%, 11% and 44% year-on-year, respectively.
Auto analysts say the ICE slump has been a rural sentiment hiccup. One look at the top 10 city sales graph for petrol and electric two wheelers tell the story. According to JATO Dynamics, top 10 two-wheeler markets (Delhi, Bengaluru, Mumbai, Ahmedabad, Chennai, Lucknow, Jaipur, Kolkata, Kochi and Gurugram) saw petrol two-wheeler sales increase just under 7% in the January-September period to 7,94,383 units in 2021 from 7,44,191 units in 2020.
In contrast, electric two-wheeler sales jumped fourfold from 5,401 units to 21,850 units in the same period. “With relentless increase in petrol prices, total cost of operation for e-two wheelers is becoming favourable. Government subsidies have helped. Companies like Ola and Ather have fanned interest with their attractive pricing,” said JATO president Ravi Bhatia.
The demand surge has prompted e-two-wheeler companies to talk ramp up. “We are scaling up manufacturing and by the end of this fiscal year, we intend to double our capacity,” said Okinawa’s Sharma. The surge is sharp in markets like Tamil Nadu, Karnataka, Maharashtra, Rajasthan and Gujarat, he added.
With the Ola and Ampere factories bringing in serious scale into the business, the electric two-wheeler market is expected to expand substantially. Last month, Ola claimed that it had clocked sales worth Rs 1,100 crore in a two-day window. “ICE two-wheelers are facing the brunt of the second wave’s economic impact because of their scale. EVs are less rural dependent too,” added Sohinder Singh Gill, director general, Society of Electric Vehicle Manufacturers.