India’s electric two-wheeler (e2W) industry is poised to grow 25 per cent in FY26, following the milestone of over one million units sold in FY25, accounting for 6 per cent of the total two-wheeler market. This growth is being fuelled by increasing competition, wider model availability, and the strategic push by legacy two-wheeler manufacturers, Crisil Ratings said in a new report.
Legacy Players Drive Market Share Gains
Within FY26, traditional two-wheeler companies captured 45% of the market share in the e2W segment; growing significantly from 15% in FY23. The companies began utilizing and capitalizing on their existing distribution networks and brand image, facilitating their growth. Two more legacy manufacturers are expected to launch electric scooters in FY26, adding to the competitive intensity.
New Players Face Profitability Challenges
According to Anand Kulkarni, Director at Crisil Ratings, “The intensifying competition and focus on capturing market share is seen stretching the break-even period of e2W players. Some players may take 2-3 years to reach EBITDA breakeven at current industry growth rate.”
While established firms enjoy cash flows from their ICE businesses, new-age e2W-only companies are likely to depend on raising fresh equity to sustain operations and scale up.
Affordability and Lower Battery Prices Spur Demand
The upfront cost difference between e2Ws and ICE vehicles has now reduced to 5–10 per cent, thanks to the launch of more affordable models with smaller battery packs. Additionally, a 20 per cent decline in battery prices during FY25 has been partially passed on to consumers, boosting sales.
Stable Battery Prices and Government Support to Aid Growth
Going forward, battery prices are expected to remain rangebound, helping manufacturers maintain competitive pricing. The government’s Production-Linked Incentive (PLI) schemes for EVs and batteries will also support profitability as volumes scale up.
Competition to Shape Industry Outlook
Crisil’s report concludes that rising competition will be a key factor in driving the overall growth and deeper market penetration of electric two-wheelers in India. As consumers continue to shift toward electric mobility, the evolving market dynamics will shape the future of the country’s two-wheeler landscape.
Also Read: All you need to know about Ola Electric Gen 3 Scooter
