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Electric scooter sales are likely to reach an inflexion point this year

Analysts predict sales of 0.7-0.8 million, which may account for around 13% of the scooter market

Electric Vehicles | two wheelers | Ather Energy

Surajeet Das Gupta  |  New Delhi 

Electric scooter

This year, sales of electric scooters are set to reach an inflexion point. They are projected to reach 0.7-0.8 million, according to estimates by makers as well as analysts and this will account for 13 per cent of the six million per annum scooter market (including ICE scooters).

When it happens, it will be the first time that the market share of electric scooter sales will have touched double digits.

They could already have reached one million sales, had it not been for the Russia-Ukraine war, which has led to a shortage of semiconductors and other materials.

Last year, 0.2 million electric scooters were sold. Analysts estimate that the two key players, and Ola Electric, will jointly sell between 0.25 million to 0.26 million scooters this year.

For 2023, the expectation, based on the capacity build-up by manufacturers, is that sales could range between 1.5-2 million, making a further dent in the overall two-wheeler market.

If that happens, electric scooters will cross another milestone; they will account for 10 per cent of the total 18-20 million per annum two-wheeler market, which includes motorbikes.

Electric scooter sales likely to reach inflection point this year

It could also mark a shift in the domestic market, where 70 per cent of two-wheeler sales come from motorcycles, in favour of electric scooters in the coming years. Apart from anything else, there are only a few electric motorbikes and these have just entered the market.

But these sales targets which manufacturers have projected, while striking, are far lower than Ola Electric founder Bhavish Aggarwal’s ambitious target to see all petrol vanish from the roads of the country by 2025.

The government has its own estimate. It believes that 80 per cent of will be electric by 2030.

“Our estimates are that about 0.7-0.8 million electric scooters will be sold in 2022. Currently there are 35-36 players but we expect a consolidation in the next two to three years. The market will grow but gradually,” said Harshvardhan Sharma, head of the auto retail practice at Nomura.

Sharma said that, as consumers change their electric scooter, as they do their ICE scooter, every three to four years, they will face a steep decline in its residual value in the second-hand market because 50 per cent of the cost is for the battery. This might have an impact on sales.

He also pointed out that electric scooters will have to tackle the pricing pressure of raw materials such as rare earth which will go up as demand outstrips supply, forcing companies to increase prices.

More importantly, Sharma said the price of electric scooters is also likely to go up when the government eventually withdraws the huge subsidy, which is currently helping to keep its price low.

However, electric scooter manufacturers say with monthly volumes hitting 60,000 per month, they expect the second-hand sale price of ICE scooters to fall in the next few months. This, they predict, will push the demand for electric scooters in anticipation of a further depreciation in the value of petrol scooters.

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First Published: Mon, March 21 2022. 06:05 IST