JM Financial said in a recently released report that the growth in penetration of electric two wheelers may stagnate in the current financial year. In the previous financial years, penetration increased from 0.3 per cent in FY21 to 4.6 per cent in FY23. However, the firm's estimates suggest that the penetration grow marginally to 4.7 per cent.
The report noted that the reduction in FAME-II subsidy has impacted E2W sales in recent months. The analysis found that high income states like Maharashtra and Karnataka are leading in terms of EV penetration. In states like Madhya Pradesh and Uttar Pradesh.
It said in the report, "Customers are facing numerous issues related to software glitches, product quality (features not working, uneven panel gaps, etc.), delays in delivery and long wait for service attention (due to inadequate manpower at service stations)."
The biggest driver in electric two wheeler sales is the low total cost of ownership. Giving insights about the market player, the report noted that Ather, Bajaj Auto, Ola and TVS are the major players. "Ather, Bajaj Auto, Ola and TVS together form 3/4th of E2W sales in India, with product offerings priced between INR 120k-150k."
Talking about how the segment can grow effectively in the coming years, it noted that as the technology is still maturing, the companies should not focus on market share. Instead, they should focus on OEMs’ approach-to-market, thoroughness of product development process and pay attention towards both, sales and service. In the current financial year, the firm has estimated that over 8 lakh units of electric two wheelers will be sold.