Lack Of Charging Infra, High Costs: Challenges Facing India’s Electric Bike Market, And The Way Ahead

India's electric bike market is facing significant challenges despite the government's push towards promoting electric vehicles.

India's electric bike market has been growing steadily over the past few years, with increasing awareness about the environmental benefits of electric vehicles and the rising cost of petrol. According to a market analysis report by Motor Intelligence, the E-Bike market in the country is projected to register a CAGR OF 9.94 per cent. Further reports suggest that the electric two-wheeler industry has ambitious plans to increase its manufacturing capacity to over 30 million units annually by 2026, which is a 50 percent increase from the highest annual sales of two-wheelers in India to date. 

However, if this goal is achieved, it could result in an oversupply of electric vehicles even in an optimistic scenario where all two-wheelers sold are electric by 2030. 

At the same time, India's electric bike market is facing significant challenges despite the government's push towards promoting electric vehicles. The market has yet to gain expected traction, with sales of electric bikes lagging far behind their fossil fuel counterparts. 

Let’s look at the challenges faced by the Indian electric bike market and the way ahead.

Lack Of Charging Infrastructure

One of the biggest challenges faced by the electric bike market in India is the lack of charging infrastructure. Unlike petrol stations, charging stations are not widely available across the country. 

This means that electric bike owners have limited options when it comes to charging their vehicles. As per an IVCA-EY report, India has 1,742 charging stations in total. Along with the infrastructural challenge, the charging time for electric bikes is also longer than that of petrol vehicles, which can be a deterrent for potential buyers.

To address this issue, the government of India has launched the FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles) scheme, which aims to establish a robust charging infrastructure across the country. 

The scheme provides financial incentives to both individuals and organisations for the purchase of electric vehicles and the installation of charging stations.

High Cost Of Electric Bikes

Another challenge faced by the electric bike market in India is the high cost of electric bikes compared to petrol bikes. While the operating cost of electric bikes is lower than that of petrol bikes, the upfront cost of purchasing an electric bike is significantly higher. 

This can be a deterrent for potential buyers, especially in a price-sensitive market like India.

To address this issue, the government of India has launched several initiatives, including the FAME scheme and GST (Goods and Services Tax) reduction on electric vehicles, to make electric bikes more affordable for the general public. 

Finance Minister Nirmala Sitharaman also made several key announcements for India's automotive and growing electric mobility sector in the 2023 budget announcements held on February 1, 2023. The major focus was on improved green mobility, and the promotion of hydrogen production and biogas production, The focus on mobility was also extended to the exemption of tax on the goods imported for the electric vehicle batteries.

Sitharaman declared that the Indian government is taking measures to promote the use of cleaner transportation options. 

One such measure is the exemption of capital goods and machinery required for the production of lithium-ion cells used in electric vehicle batteries. This step is aimed at encouraging the adoption of cleaner mobility alternatives. 

In addition, the customs duty on lithium-ion batteries has been reduced from 21 percent to 13 percent, excluding textiles and agriculture commodities. These actions are expected to accelerate the growth of the EV industry in India and support the country's transition to a low-carbon economy. This will push the adoption of electric vehicles in the country. 

In addition, several electric bike manufacturers have also started offering financing options to make their products more accessible to customers.

Limited Range Of Electric Bikes

Another challenge faced by the electric bike market in India is the limited range of electric bikes. Most electric bikes available in the market today have a range of around 60 - 70 kilometres on a single charge, which may not be sufficient for long-distance travel. This can be a deterrent for potential buyers, especially those who rely on their bikes for daily commutes.

While the limited range of electric bikes is one of the challenges facing the adoption of electric mobility, several initiatives are underway to address this issue. The development of fast-charging infrastructure, advancements in battery technology, and regenerative braking systems will play a crucial role in increasing the range of electric bikes and accelerating their adoption. 

Additionally, the Centre can also provide incentives for research and development in this area to encourage innovation.

Lack of Awareness Among Consumers

Another challenge faced by the electric bike market in India is the lack of awareness among consumers about the benefits of electric bikes. While there is increasing awareness about the environmental benefits of electric vehicles, many consumers are still not aware of the cost savings and other benefits of electric bikes.

According to a survey conducted by YouGov, only 31 percent of Indians are aware of e-bikes. This lack of awareness makes it difficult for companies to market their products and reach potential customers. 

To address this issue, the government of India can launch awareness campaigns to educate consumers about the benefits of electric bikes. Electric bike manufacturers can also play a role in this by providing more information about their products and the benefits they offer.

The challenges faced by India's electric bike market are significant, but there is also immense potential for growth in this sector. With the right policies and initiatives in place, India can become a leader in the global electric bike market. 

The government of India, electric bike manufacturers, and other stakeholders need to work together to address the challenges and pave the way for a brighter future for electric bikes in India. This is why to combat the aforementioned challenges the government in 2023 budget announcements highlighted the Indian government's commitment to promoting green mobility and sustainable energy solutions. 

In addition to tax exemptions on capital goods related to EV batteries, the government has allocated Rs 19,700 crores towards the National Green Hydrogen Mission, aimed at achieving 5MMT annual production of green hydrogen by 2030. This initiative will give crucial support to India's EV sector to help India transition towards a low-carbon economy, with the net-zero mission of 2070. 

Furthermore, the Gobardhan scheme will support the growth of biogas with an investment of Rs 10,000 crores, which includes the establishment of 200 compressed biogas plants and 300 cluster-based plants. The implementation of these measures is expected to accelerate the adoption of cleaner transportation options and help India flourish in the EV market.

(The author is the founder and CEO at eBikeGo)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.

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