The Delhi government in India has drafted its EV Policy 2.0 to boost electric mobility adoption, to drastically reduce pollution in the region. Currently under consideration, the policy plans to ban new registrations of petrol, diesel and CNG-fueled two wheelers.
With two-wheelers accounting for almost two-thirds of total vehicles on Delhi’s roads, the government has stated that if it could focus on electrifying two-wheelers, then pollution rates would decrease significantly.
If approved, the ban of two-wheelers emitting emissions in Delhi will reportedly be actioned by August 15 2026. This move would mean that only new electric two-wheelers will be allowed to register in the region, which could prompt a significant boost of them on Delhi roads. With petrol-powered mopeds and motorcycles currently accounting for the majority of two-wheeler sales in Delhi, this would be a big transition for the two-wheeler sector.
Delhi’s proposed EV Policy 2.0 benefits for electric two-wheeler customers
The government’s proposed policy will also offer subsidies of up to 30,000 Indian rupees (€269) on electric two-wheeler purchases based on battery capacity, as well as road tax exemptions, registration fee waivers and incentives for scrapping non-electric two-wheelers.
“The Delhi EV policy draft also includes plans to develop charging infrastructure and battery recycling plants,” said officials.
The electric micromobility sector in India is flourishing, and it is estimated that by 2030 it could be one of the world’s largest markets for the industry. A combination of economic drivers, infrastructure development, and policies are among key factors facilitating the growth.
The transition to electric two- and three-wheeled micromobility options in India is mainly being driven by workers for whom mobility is integral to their livelihoods – delivery riders, small traders, and informal workers. This is a contrast to the landscape in Europe, where micromobility uptake can be seen as being driven by urban mobility and connectivity.
Economic factors
At the heart of the transition is a shift in the Total Cost of Ownership (TCO) of vehicles, which is of paramount importance to the estimated 15 million workers in India’s gig economy (projected to reach 23.5 million by 2030).
Electric variants of mopeds or motorcycles represent a significant 40-50% lower TCO compared to ICE models, over a three-year ownership period. For those using the vehicle as an integral tool for their work, this is the difference between merely subsisting, and the ability to save money. Some industry observations suggest that those working in delivery and logistics who transition from ICE to electric models – especially those compatible with swift and convenient battery-swapping services – can increase their monthly take-home income by almost 20%.
Market size and infrastructure
Working on the assumption that electric models account for 25-30% of the Indian two-wheeler market by 2030, industry forecasts show that annual electric two-wheeler sales would amount to 6.5-9 million units.
This national fleet would need effective supporting infrastructure, estimated at 2.5 million public charging and battery-swapping touchpoints across the country, and necessitating a parallel sector in energy services, with new jobs arising in the “green-collar” workforce. This would include roles from fleet management and swap-station operations, to more high-tech R&D specialisms, with many more in between. As Nagesh Basavanhalli writes, “micromobility could become a rare industrial sector that simultaneously drives decarbonisation, employment, and skills upgrading.”
Battery-swapping has become the preferred choice in India’s delivery and logistics sectors, where minimised downtime and optimised TCO are crucial. Industry estimates point to over 300,000 swaps on a daily basis, and fleet operators favour Battery-as-a-Service models which enable substantially lower operating costs compared to ICE fleets. With this model, the fleet owners can enjoy reduced upfront vehicle costs, leading to more efficient use of capital while speeding up the electrification of fleets.
The role of policies
It is noted that India presents a contrast to China, where the boom in electric micromobility has been primarily mandate-driven, alongside large-scale manufacturing capability and strong regulations. In India, the uptake of electric two-wheelers has been supported by a framework of positive policies which offer incentives for adoption, which have appeal for the cost-conscious users described above. A continued positive policy framework, which aligns with industry stakeholders, will be essential in maintaining the country’s momentum in micromobility expansion.
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India’s electric two-wheeler market is experiencing a surge in startups, climbing from 54 in 2021 to over 150 in recent times. This growth is partly thanks to government incentives aimed at promoting clean vehicles and reducing fossil fuel imports.
An analysis by Bernstein forecasts continued expansion, projecting annual sales of 15-20 million units over the next decade, marking a 15-20 times increase. This surge in startups has fostered intense competition, particularly in the mainstream segment, where 85% of the 65 models launched last year showcased high-speed capabilities, a departure from previous limited offerings.
The average battery capacity of newly launched models has also seen a notable rise, from 2.3kWhr in 2022 to 3kWhr. India’s ambitious goals of achieving 30% electric vehicle penetration by 2030 and net-zero carbon emissions by 2070 are driving these developments.
Key to this momentum is the government’s FAME II scheme, providing subsidies to buyers, being recently extended to 2024. Despite a reduction in subsidies in mid-2023, the number of electric two-wheeler companies continued to climb, reaching 152 by January 2024. Importers, particularly sourcing components or entire vehicles from China, have significantly contributed to this rise.
While startups dominate the top ranks, led by Ola Electric, accounting for 39% of the market share as of January 2024, sales volumes remain concentrated among the top five players, comprising 85% of the market. Moreover, low barriers to entry, reliance on outsourced models, and readily available components characterize the industry landscape, with only half of the founders possessing engineering backgrounds.
As the industry matures, the government is moving towards production-linked incentives (PLI) favouring domestic manufacturing. While established automotive giants have largely secured PLI benefits, only a handful of startups have qualified, potentially providing cost advantages to major incumbents.
Looking ahead, Bernstein’s analysis anticipates room for five startups to emerge as significant players alongside established companies. Nonetheless, intense competition could temper industry profit margins and returns in the medium term.
The e-bike market adoption rate in India soared by 39%, from 4.05% in 2022 to 5.63% in May this year, according to government data.
Notably, states including Goa, Kerala, Karnataka, and Maharashtra, alongside 6 others, surpassed the national average of 5.63% adoption rate, with Goa topping the list at 17.2%, according to registration data from Vahan, a central government vehicle portal.
The top 4 states exceeded a 10% market growth rate, a significant jump from the 1% recorded in 2019. India has set a target for electric vehicles (EVs) to constitute 80% of its two-wheeled market by 2030. In addition to central government subsidies, various states have implemented favourable policies including tax benefits, efficient scrappage programmes, lower power tariffs, and expanded charging infrastructure, contributing to the industry’s growth.
EV industry growth in India
Despite representing a relatively small portion of the overall two-wheeled sales, with 392,681 electric units sold out of 6.98 million by May 2023, the growth it represents is evident. The Society of Manufacturers of Electric Vehicles reported that sales of electric two-wheelers in India rose to 846,976 units in 2022-23’s fiscal year, a two-and-a-half-fold increase from the previous year’s 327,900 units.
Bain & Company stated in December 2022 that two and three-wheeled transportation will be the frontrunners in EV adoption, projecting a 40-45% market penetration rate by 2030.
CAKE, the Swedish premium lightweight electric motorcycle manufacturer, has announced its partnership with Pepfuels, an ONGC-funded entity, under the brand name CollarEV, marking the company’s entry into the Indian market. This collaboration follows CAKE’s successful Asia expansion with Goldwin Inc in Japan and Kolon Automotive in South Korea.
A limited collection of 250 CAKE Makkas constitutes the entry into India. The CAKE Makka is the first platform to be homologized for India and marks the starting point of additional models to follow. The initiative is brought forward by the founders of ONGC-funded entity Pepfuels with the brand name CollarEV.
The first stage is initiated by a market entry campaign as the bikes are being shipped and meant to arrive during August, following a first-come, first-served basis. “It’s an exciting entry into one of the fastest-growing and largest electric two-wheeler markets, globally. The opportunity is immense, and we are humbly moving in with a step-by-step approach, to learn and do right,” says Stefan Ytterborn, CEO & Founder of CAKE.
ONGC and Pepfuels founders express their enthusiasm for backing and supporting Pepfuels as they venture into the high-performance and premium electric bike segment in India. They believe that the future of transportation lies in clean and green energy and are committed to building a greener future for generations to come with the collaboration between CollarEV and CAKE.
“We are thrilled to be backing and supporting Pepfuels as they venture into the high-performance and premium electric bike segment in India. We believe that the future of transportation lies in clean and green energy. We are taking CollarEV along with CAKE’s cutting-edge technology and are on the way to building a greener future for generations to come. We are incredibly proud to announce the CollarEV collaboration with CAKE to venture into the high-performance and premium electric bike segment in India, which is an untouched segment. We believe future synergies between CAKE and CollarEV will involve assembling and manufacturing CAKE’s existing models and developing new models for the Indian market,” commented Tikendra Yadav, CEO & Founder of Pepfuels.
About CollarEV
CollarEV, an ONGC-funded entity by Pepfuels, is dedicated to promoting clean transportation initiatives in India. Through this partnership, the companies aim to drive sustainable mobility solutions in the public sector. Known for its innovative fuel delivery systems, such as location-based fuel delivery, this commitment aligns with ONGC’s new dedication to environmental responsibility, making CollarEV a powerful force for green transportation in India.
About CAKE
CAKE is a Swedish maker of premium lightweight, electric motorcycles, and mopeds, with a clear mission to inspire towards a zero-emission society, by combining excitement and responsibility. The model range currently consists of five different platforms – the off-road beast Bukk, our versatile off-roader Kalk, the modular utility bike Ösa, the urban commuter Makka, and the strong and practical e-bike Åik. Thanks to an extensive range of accessories and configurations, CAKE is addressing a wide matrix of users and applications, including commercial use for last-mile delivery and other short-haul urban transportation. Along with numerous awards and recognitions for its design and innovative approach to mobility and other societal challenges, CAKE was identified as one of the world’s most innovative companies by Fast Company in both 2020 and 2021 and received the Time Magazine 100 most important inventions award in 2021.
Comments Off on icct considers potential of charging methods and incentives to catalyse electric two-wheeler market
Following on from an article about state government incentives in India are making many electric two-wheeler models near equivalent in price to gasoline models, a new piece by The International Council on Clean Transportation (icct) looks in detail at Total Cost of Ownership (TCO) and charging infrastructure incentives.
Two-wheelers are a mass market in India, and lower upfront costs also equate to lower monthly costs for those who borrow. But what about running costs? Fuel is the key factor, and with gasoline prices rising, and set to continue to do so, electric two-wheelers present a very appetising alternative.
The article takes a look at range, noting that many short-range electric two-wheeler models can achieve 75 km to 100 km of real world-range in city driving conditions, while mid-range models with real-world range closer to 150 km are in the pipeline. And with these figures and general usage patterns, charging could be well managed at home only. Home charging, however, relies very much on the user’s behaviour and can present a range of particular obstacles. For these reasons, public charging infrastructure is also important in the electric mobility big picture.
It is noted that there would be a greater reliance on public charging in the earlier years of adoption, while home facilities are installed and integrated into new developments. The author goes on to break down the TCO considerations when including the impact of public charging:
“From our earlier work, we know that electric models have a lower total cost of ownership (TCO) than gasoline models at current gasoline prices and with home charging. Since the cost of public charging can be high, sometimes twice as high as residential electricity tariffs, I build here on our cost parity model to examine what happens to TCO parity under different charging scenarios. I assumed the average residential electricity tariff to be INR 7/kWh and the average public charging tariff to be INR 14/kWh. Further, I looked at the impact on TCO parity at two baseline prices for gasoline—average prices in 2021 and in 2019—and included a 5% annual escalation in both electricity and gasoline costs.”
The charts below show the timescales at which a 150km real-world range electric motorbike may reach 10 year TCO cost parity with gasoline fueled motorbikes, first without, and then with incentives. The incentives calculation “includes the revised FAME-II upfront subsidy and the preferential Goods and Services Tax (GST) benefit for the electric model.”
chart sourced from theicct.org
chart sourced from theicct.org
The figures illustrate that cost parity could be achieved by 2022 solely via home charging, and by 2023 with entirely public charging and no incentives. The charts also adjust to consider gasoline prices as they were 2 years prior, and at that rate parity is reached in 2023 with 100% home charging, and 2025 with only public charging. It can be seen that a lower gasoline price and reliance on public charging together cause the greatest delay in reaching TCO parity.
By contrast, when the chart takes purchase incentives into account, parity is already be achieved even if relying solely on the more expensive public charging. On top of this, incentives can also counteract a gasoline cost reduction to 2019 prices. There author notes that, “the current upfront purchase incentives are playing an enabling role in alleviating any charging cost related anxiety that consumers might have. That’s especially useful in the early phases of the market when the infrastructure for home charging is less mature.”
The article goes on to elaborate on some of the challenges and barriers involved in home charging, such as socket requirements, and objections from neighbours or housing associations. It concludes that achieving TCO parity is key to the adoption of electric two-wheelers by the mass market, and that it is therefore the perfect time for governments to take action in incentivising their uptake.
