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

The anticipated easing of rare-earth supply is projected to catalyze robust growth in the electric two-wheeler (E2W) sector in India, with an expected increase of 16-18 percent in the next fiscal year. This follows a moderation to 12-13 percent growth in the current fiscal year, attributed primarily to supply chain disruptions, as reported by Crisil Ratings. The ongoing fiscal year has seen E2W growth impacted by temporary shortages in rare-earth magnets and changes in the goods and services tax (GST) affecting internal combustion engine (ICE) models. In the preceding fiscal year, the electric two-wheeler market experienced a significant volume growth of 22 percent. According to Anuj Sethi, Senior Director at Crisil Ratings, the disruption in supply caused by the rare-earth magnet shortage has adversely affected E2W volumes around mid-year. However, with the easing of supply constraints, manufacturers have started to introduce discounts and lower-priced electric models, effectively narrowing the price gap between ICE and electric vehicles. This strategic shift has facilitated a recovery in volumes, positioning the E2W market for a rebound as consumer demand for environmentally friendly transportation options continues to rise. As India pushes towards a greener future, the electric two-wheeler segment remains a focal point for manufacturers and consumers alike. The anticipated growth in this sector is not only crucial for the automotive industry but also aligns with the government’s objectives to enhance sustainable mobility. With increasing investments in electric vehicle infrastructure and favorable policy frameworks, the outlook for electric two-wheelers in India appears promising, setting the stage for further innovations and market expansion. As manufacturers adapt to changing dynamics, the focus on electric mobility is expected to transform the landscape of personal transportation in the country.