Over a Quarter of Two-wheelers Sold in 2024 to be Battery Powered

• The electric two-wheeler (E2W) market is growing at a rapid clip, with 2024 sales penetration expected to be 1.5 times that of four-wheeler passenger EVs.
• The top five E2W players – Yadea, AIMA, TAILG, Sunra and Luyuan – captured more than 70% of the overall E2W sales in 2023.
• Going forward, this will kickstart a new E2W ecosystem and a strong tussle between greenfield E2W brands and incumbent 2W brands.

With the growing urbanization and increasing traffic congestion in cities, two-wheelers (2Ws) are becoming the preferred mode of transport for shorter commutes. According to Counterpoint’s Global Two-wheeler Sales Tracker, 2W sales grew by less than 1% YoY in 2023. India is projected to surpass China in 2024 to become the world’s largest 2W market. The global 2W market is predominantly concentrated in Asian countries like China, India, Indonesia, Vietnam and the Philippines. Going forward, it is the electric two-wheeler (E2W) segment of the market that will see more growth, with over a quarter of 2Ws sold in 2024 expected to be battery powered.

Commenting on the market dynamics, Senior Analyst Soumen Mandal said, “Economic growth, consumer preference for 2Ws for short-distance commutes, and increasing 2W demand in the shared mobility space will help India overtake China. The 2W market is heading towards maturity, but the adoption of electrification is expected to rise significantly, particularly after 2025. Especially, Southeast Asian countries and India will witness mainstream adoption of E2Ws with a faster transition to EVs in these markets. The E2W penetration in the world’s overall 2W market is expected to grow to 1.5 times that of four-wheeler passenger EV sales in 2024. China currently leads the E2W market in terms of volumes, followed by India and Vietnam.”

The emerging E2W market is dominated by Yadea, AIMA, TAILG, Sunra and Luyuan, together capturing more than 70% of total sales at the end of 2023. All these brands are “EV-first” or greenfield EV manufacturers hailing from China, highlighting the country’s dominant position in the E2W market. Among the top 10, three E2W brands are from India – Ola Electric, TVS Motor and Ather Energy, reflecting India’s emerging presence in the E2W market. Ola and Ather are also greenfield “EV-first” 2W companies challenging the incumbents such as TVS, Hero and Bajaj. In the premium 2W segment, we are seeing the entry of newer players such as Ultraviolet, Revolt Motors, Energica Motor, Damon and ARC Vehicle to compete with Harley Davidson, Enfield, Yamaha and others.

Mandal added, “The traditional 2W manufacturers such as Honda, Yamaha, Bajaj, Hero, TVS, Haojue and Piaggio, much like traditional passenger vehicle companies, have been cautious about entering the E2W space. However, with their R&D capabilities, production and distribution scale, experience with technology transitions, strong brand value and a loyal customer base, traditional 2W players could enjoy some advantage in expanding into the E2W market. However, partnering with newer E2W ecosystem players will be a challenge for some, especially from the perspective of mindset and operations transformation.”

We estimate that the E2W share in global 2W sales will reach 44% by 2030, while cumulative E2W sales will exceed 150 million units between 2024 and 2030, driving global scale for the emerging E2W value chain.

Commenting on the market’s digital landscape, Research Vice President Neil Shah said, “Similar to the four-wheeler market, we are seeing the 2W market transforming to embrace connectivity, especially against the backdrop of increasing electrification. Electrification entails ubiquitous wide area network connectivity, like 4G now or 5G RedCap in the future, along with related software and services. This necessitates a move to a more advanced digital instrument cluster which brings compute, software and OS together to drive multiple location-based applications and services for the riders. All this is attracting newer ecosystem players to the 2W market, such as those supplying chipsets, batteries and other related components (like Qualcomm, MediaTek, Delta, CATL and Samsung SDI) and those providing infrastructure (like Google, Amazon, Baidu and AWS for cloud, BlackBerry and Google for software, TomTom, HERE, MapMyIndia, Baidu and Spotify for applications, and ChargePoint, Statiq, Tata Power, MamCharge, LV C-CHONG, VinFast, Ola, Ather and Electrify America for electric charging). The overall semiconductor consumption by 2Ws will also increase to 15% by 2030, as we are seeing in the 4W market. At some point, AI and compute together will drive analytics for OEMs to improve upon the design and performance, and launch newer features and services to enable intelligent and safer driving experiences.”