Electric Motorcycles & Scooters Market Trends

Growth Drivers

• Stringent Regulations to Keep Carbon Emissions Under Check – It is estimated that the annual carbon dioxide emissions by a typical passenger vehicle should amount to 5 metric tons. However, this figure varies as per different kinds of fuel, the fuel economy, and the distance traveled by the vehicle per year. Several regulatory measures have been adopted by governments and other organizations to curb these emissions within a set time frame. For instance, as per the European Green Deal that was unveiled by the European Commission in 2020, the European Union (EU) should attain climate neutrality by 2050.  To achieve this goal, the EU has planned to reduce more than 89% of transportation-induced greenhouse gas emissions before 2050.

• Supportive initiatives by Governments to Promote EVs – Several governments worldwide are adopting initiatives aimed at increasing the consumption of EVs. Tax reductions on EVs, a special electric mobility zone, and battery-swapping policies by the Government of India are instances of such initiatives. Further, in 2019, the Ministry of Heavy Industries under the Indian Government approved the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme. As per FAME II, about 86% of a budgetary outlay equivalent to ~USD 1 billion would be used to increase demand for EVs in the country.

• Grave Concern Regarding Air Pollution in Different Parts of the World – It is estimated that annually ~7 million people succumb to health complications after being exposed to poor air quality.

• Steady Drop in the Price of Batteries Used in EVs – Lithium-ion batteries play a major role in the success of EVs in providing sustainable and environmentally friendly transportation. The global pricing of lithium-ion battery packs, which stood at ~ USD 181 per kilowatt hour in 2018, fell to ~ USD 138 per kilowatt hour in 2020. This pricing has been projected to drop further to reach ~ USD 59 per kilowatt hour in 2030.

Challenges

• Problems related to the overheating of batteries and their ignition in EVs - It has been observed that yearly more than 2,820 electric cars catch fire worldwide. Though EVs catching fire is rarer when compared to gas-powered vehicles going through the same, it still poses a threat to the passengers in the EV. Hence, this threat is expected to hinder market growth significantly.

• Uncertainties about the range of transportation for EVs among the consumers
• Inadequate infrastructure, including a limited number of charging stations for EVs exists in some parts of the world