Electric two-wheeler (E2W) penetration in India could reach 40% by FY31 in an optimistic scenario.
The overall two-wheeler industry is expected to grow at 8% CAGR, reaching 3-3.1 crore units annually by FY31.
Growth drivers include increased EV launches, government support, infrastructure development, reduced battery prices, and faster consumer adoption.
Legacy players expanding EV portfolios and new entrants entering the market are accelerating E2W growth.
Electric two-wheeler penetration could rise to about 40% by FY31 in an 'optimistic scenario' when the overall two-wheeler industry in India touch 3-3.1 crore units annually growing at 8% CAGR, according to Ather Energy Ltd.
The growth is expected to be driven by increased EV launches, strong government support, rapid infrastructure development, reduced battery prices, and a faster consumer shift, the company said in its annual report for 2024-25.
In its management discussion and analysis, Ather Energy said the rapidly expanding EV market, propelled by legacy players increasing their EV portfolios and new entrants expanding capacity, is accelerating growth.
The entry of established brands into the EV market is expected to provide significant momentum. The expansion of distribution in the E2W (electric two-wheeler) market is also expected to fuel the sector's growth, it said.
"Overall, two-wheeler sales are projected to grow at 7% CAGR, reaching 29-30 million units by FY31," the company said.
The electric two-wheeler (E2W) market is expected to grow at 41% CAGR, while the internal combustion engine (ICE) market will see a moderate growth of 2% CAGR. By FY31, E2Ws are anticipated to account for 35% of overall two-wheeler sales, it added.
"In an optimistic scenario, driven by increased EV launches, strong government support, rapid infrastructure development, reduced battery prices, and a faster consumer shift toward electrification, industry sales could grow at 8% CAGR, reaching 30-31 million units by FY31," Ather Energy said.
In this scenario, the company said,"EV penetration may rise to 40%, compared to the 35% projected in the base case." Citing VAHAN and SIAM data, the company said,"India has established itself as one of the largest motorised two-wheeler markets in the world by volume, with domestic sales reaching 20 million units in FY25." In their message to the shareholders, Ather Energy Founders Tarun Sanjay Mehta Swapnil Babanlal Jain said electric vehicle penetration in scooters touched 16% in FY25.
"We anticipate this growth to continue, and scooters to power this growth. By FY31, an estimated 70-75% of scooters will be electric, and we are well-positioned to capitalise on this growth," they said.
In FY25, the company said EV penetration in two-wheelers reached 5.8% up from 5.1% in FY24. Scooters continued to lead electrification with approximately 15.7% of scooters in FY25 being electric.
Scooters are expected to lead electrification in 2W. E2W penetration in scooters is expected to be as high as 70% in FY31 and in motorcycles it is projected to be 10% by FY31, it added.
Sharing an update on its third plant at Chhatrapati Sambhajinagar (formerly Aurangabad) in Maharashtra, Ather Energy said,"The first phase of the facility, work for which has already begun, is planned to commence production in phases during FY27." It will add 5 lakh E2Ws of installed annual production capacity and upon completion of construction for both phases the company's total installed capacity, including from the Hosur Factory, is expected to reach a total of 14.2 lakh E2Ws per year.
