“India’s Electric Two-Wheeler Growth Set to Surge 16-18% Next Fiscal as Rare-Earth Supply Eases, Says Crisil Ratings”

The anticipated easing of rare-earth supply is projected to catalyze significant growth in the electric two-wheeler (E2W) market in India, with volume growth expected to reach 16-18 percent in the upcoming fiscal year, as per insights from Crisil Ratings. This growth follows a moderated rate of 12-13 percent in the current fiscal, primarily attributed to ongoing supply chain constraints impacting the availability of rare-earth magnets. Crisil Ratings highlighted that the current fiscal year has witnessed a slowdown in E2W growth, driven by temporary disruptions in the supply of essential components and the recent rationalization of the Goods and Services Tax (GST) on internal combustion engine (ICE) vehicles. In the previous fiscal year, the electric two-wheeler segment experienced a robust growth rate of 22 percent. Anuj Sethi, Senior Director at Crisil Ratings, noted that the supply disruptions stemming from the scarcity of rare-earth magnets have significantly impacted E2W volumes, particularly around the middle of the year. However, as the supply situation begins to stabilize, coinciding with adjustments to pricing in ICE models due to GST changes, original equipment manufacturers (OEMs) are strategically leveraging discounting and the introduction of more affordable electric models to bridge the price disparity between ICE and electric vehicles. This proactive approach has played a crucial role in supporting the recovery of E2W volumes, demonstrating resilience in the face of supply chain challenges. With the Indian electric two-wheeler market poised for recovery, the focus will likely be on enhancing production capabilities and optimizing supply chains to meet the growing demand for sustainable transportation solutions. As the country moves towards greener mobility options, the role of electric two-wheelers in achieving environmental sustainability and reducing carbon footprints cannot be overstated. The integration of innovative technologies and improved infrastructure will further bolster the growth trajectory of the E2W segment, making it an essential component of India’s transition to electric mobility. As the market evolves, stakeholders are encouraged to remain vigilant and adaptive to changes in supply dynamics and consumer preferences, ensuring a robust future for electric two-wheelers in India.