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

According to Crisil Ratings, the anticipated easing of rare-earth supply is projected to propel electric two-wheeler (E2W) volume growth in India to a range of 16-18 percent in the upcoming fiscal year, rebounding from a moderated growth rate of 12-13 percent during the current fiscal year due to significant supply chain constraints. The report highlights that the slowdown in E2W growth this fiscal year can be attributed to temporary disruptions in the supply of rare-earth magnets, coupled with the rationalization of the goods and services tax (GST) on internal combustion engine (ICE) vehicles. In the previous fiscal year, the electric two-wheeler segment witnessed a robust growth rate of 22 percent. Crisil Ratings Senior Director Anuj Sethi noted that the supply disruptions stemming from the rare-earth magnet shortage adversely impacted E2W volumes around mid-year. However, as the availability of these crucial components began to improve, coinciding with the GST-related price adjustments for ICE models, original equipment manufacturers (OEMs) took proactive measures by implementing discounts and launching more affordable electric models to bridge the price gap between ICE and electric vehicles (EVs). These strategic moves have not only facilitated a recovery in E2W volumes but also positioned the electric two-wheeler market for a promising future. With the Indian government pushing for sustainable transportation solutions and the increasing consumer demand for eco-friendly mobility options, the electric two-wheeler sector is poised to experience significant growth in the coming years. The easing of rare-earth supply is expected to play a pivotal role in enhancing production capabilities, thereby enabling manufacturers to meet the rising demand for electric scooters and motorcycles across the country. As the market continues to evolve, it is essential for stakeholders, including manufacturers, policymakers, and consumers, to stay informed about the ongoing developments in the electric mobility landscape. This growth trajectory not only signifies a shift towards greener transportation solutions but also aligns with India’s commitment to reducing carbon emissions and promoting renewable energy sources. As electric two-wheelers become more accessible and affordable, the Indian automotive market is likely to witness a transformative shift, marking a new era in sustainable mobility. In conclusion, the combination of easing rare-earth supply, strategic pricing adjustments by OEMs, and government support for electric mobility initiatives will contribute to a robust recovery and growth in the electric two-wheeler segment, setting the stage for a sustainable transportation future in India.