Will E2W Industry Overcome Fire Breakout Sales Hindrance In 2023?
The electric vehicle (EV) sector dominated headlines in India and across the globe in 2022. More importantly, it has evidently been a record-breaking year for the Electric two-wheeler (E2W) market, surpassing the 600,000 unit sales target and accomplishing a 4 per cent market penetration. Despite its enormous success, India’s electric two-wheeler market volume is falling short of the target figures set by Niti Aayog and many other research organisations. Many electric two-wheeler industry players liken it to a mix of reasons, such as supply constraints, impending federal regulations, a slowdown in the reimbursement of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) II incentives, and, most notably, the backlash exacerbated by isolated fire incidents, which forced start-ups to halt their advancement and re-orient plans. Despite the challenges, the EV industry is optimistic that demand for electric two-wheeler will remain strong and the adoption rate will continue to climb in 2023. Here’s why:
Push from the Government
One of the primary reasons for the positive outlook for the EV industry in the calendar year 2023 is that the Indian government is preparing to actively promote the adoption of electric vehicles through various policy measures such as tax exemptions and subsidies for EV manufacturers and buyers. These policies will increase the number of EV manufacturers entering the market, resulting in higher competition and innovation, which will further improve EV technology and lower selling costs.
Addressing the Burning Issue
Following a few fire breakout incidents last year, many industry players are raising the bar for manufacturing and testing procedures by taking into account India’s distinctive climate, geography, and road surfaces. The measures include implementing strict safety standards and conducting regular safety inspections of EV components which will instil confidence in consumers before purchasing.
Growing Awareness
Electric two-wheelers are gaining popularity in India as a low-cost method of transportation. Indian consumers are becoming more aware of the environmental and economic benefits of EVs, which is driving demand for electric two-wheelers. Furthermore, because they do not require the same level of routine maintenance as gasoline-powered vehicles, electric two-wheelers are considerably simpler to use and maintain. With EVs’ increasing range and decreasing cost, an increasing number of riders will be able to afford electric two-wheelers in the coming years.
Development of EV Ecosystem
India is rapidly gaining recognition as a global hub for auto components. This opens up opportunities such as robust demand, competitive advantage and cost-effective manufacturing compared to Europe and Latin America, as well as larger export opportunities. Multiple industrial and academic collaborations to develop EV components including electric motors, batteries, and power electronics will also boost EV sales. Additionally, the increasing availability of charging infrastructure in various parts of the country will also help to overcome the range anxiety among EV buyers.
Conclusion
India has recently made two significant commitments to reduce greenhouse gas (GHG) emissions by 2030. The first goal is to reduce the total projected carbon output by one billion tonnes, while the second is to curtail the carbon intensity of the Indian economy by 45 per cent. India has also set the goal of obtaining 50 per cent of its energy needs from renewable sources by 2030. The transportation sector, which contributes the third-highest amount of carbon emissions in India, is a pressing area that requires a clean energy shift. Therefore, electric vehicles, particularly EV two-wheelers, are poised to become the primary clean mobility alternative, with all stakeholders prioritising efforts to facilitate their widespread adoption.
