Indian auto companies resort to cost-cutting to boost market for electric scooters

These initiatives are narrowing the price gap between electric and petrol scooters, and are anticipated to accelerate the adoption of electric two-wheelers in India.

Ola Electric recently slashed the price of its entry-level scooter, the S1X+, by ₹25,000, aligning it with the cost of Honda's Activa, a popular petrol-powered scooter, reported The Economic Times. This move is part of a broader trend in the electric two-wheeler market, with companies like Ather Energy and Bajaj Auto's Chetak Technology introducing affordable models and implementing substantial price reductions.

These initiatives are narrowing the price gap between electric and petrol scooters, hoping to accelerate the adoption of electric two-wheelers in India.

Although electric two-wheeler sales are projected to reach around 8,50,000 units in fiscal 2024, they constitute only 4.5 per cent of the market. The primary challenges hindering widespread adoption include the higher upfront cost compared to petrol counterparts and insufficient charging infrastructure.

According to the publication, companies are addressing these challenges by evolving pricing strategies, prioritising affordability, and supporting government initiatives for charging infrastructure development. Cheaper batteries have also played a role in price reductions, as seen with Tata Motors cutting prices for its electric vehicles.

Ola Electric's S1X+ now retails at ₹85,000, competing directly with the Honda Activa priced between ₹76,000 and ₹90,000, the report further stated. The company believes that this pricing strategy, combined with a diverse range of models meeting various needs, will encourage customers to choose electric scooters over traditional petrol-powered ones. Other industry players like Ather Energy and Bajaj Auto are following suit.

In the previous month, the electric vehicle division of Bajaj Auto introduced an updated Chetak scooter, available in two versions with price tags of ₹1.15 lakh and ₹1.35 lakh, respectively.

Market Performance Data

According to information from the government's Vahan portal, electric two-wheeler manufacturers recorded sales of 81,608 units in January 2024, reflecting a 26 per cent increase compared to the same period the previous year, and an 8 per cent rise from the preceding month.

Shift in Market Share

Established players such as TVS Motor and Bajaj Auto are expanding their market presence in the electric scooter segment, leveraging their extensive distribution networks. This trend is occurring as the market share of companies exclusively producing electric two-wheelers is diminishing in this rapidly growing market.

Upcoming Releases

The anticipated launch of electric two-wheelers like the Honda Activa Electric, Eko Tejas' E-Dyroth, and the Gogoro 2 series is expected to contribute significantly to the growing demand in the market.