Ather Energy Ltd., a leading electric vehicle manufacturer, projected that electric two-wheeler (E2W) penetration in India could reach 40% by FY31 under an optimistic scenario, as outlined in its 2024-25 annual report. This growth is expected to occur as the overall two-wheeler market expands to 3-3.1 crore units annually, growing at an 8% compound annual growth rate (CAGR).
Key drivers include increased EV launches, robust government incentives, rapid charging infrastructure development, declining battery costs, and a faster consumer shift toward electrification. The report highlights that scooters will lead this transition, with E2W penetration in scooters projected to reach 70-75% by FY31, compared to 10% for motorcycles.
Ather Energy’s analysis indicates that India’s two-wheeler market, one of the largest globally with 20 million units sold in FY25, is poised for significant transformation. The E2W segment is expected to grow at a 41% CAGR, far outpacing the 2% CAGR for internal combustion engine (ICE) vehicles, with overall two-wheeler sales projected to reach 29-30 million units by FY31.
In FY25, EV penetration in two-wheelers rose to 5.8% from 5.1% in FY24, with scooters achieving a 15.7% electrification rate. The entry of legacy brands and new players expanding their EV portfolios, alongside enhanced distribution networks, is set to accelerate this shift, according to the company.
To support this growth, Ather Energy is expanding its manufacturing capabilities with a new facility in Chhatrapati Sambhajinagar, Maharashtra, set to begin production in phases from FY27. This plant will add 5 lakh units of annual E2W production capacity, bringing the company’s total capacity, including its Hosur factory, to 14.2 lakh units per year upon completion.
Founders Tarun Sanjay Mehta and Swapnil Babanlal Jain expressed confidence in capitalizing on the scooter-led electrification trend, stating, “We are well-positioned to capitalize on this growth.” With India’s two-wheeler market on the cusp of an electric revolution, Ather Energy’s projections underscore the transformative potential of policy support and infrastructure development.
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