With the boom of electric vehicles reaching its peak, especially in two wheeler segment, complete penetration of EV is not beyond reach.
Government think tank NITI Aayog has predicted the path of transitioning towards electric mobility to happen faster than anticipated.
According to the recent report published by NITI Aayog and Technology Information, Forecasting and Assessment Council (TIFAC), titled ‘Forecasting Penetration Of Electric Two-Wheelers In India: A Bottom-Up Analysis reveals that in an ‘optimistic scenario’, there will be 100% penetration of two-wheelers EV in the country by the financial year 2026-27 (FY27).
It also predicted a penetration of 72% in a ‘technology-driven scenario’ where current initiatives such as subsidies are withdrawn by 2024.
Using an agent-based tool jointly developed by TIFAC and NITI Aayog, eight separate scenarios were developed for analyzing the future penetration of electric two-wheelers in the country.
These scenarios were constructed on the basis of three major factors – demand incentives, cost of battery and vehicle performance in terms of both range and power.
The report also called for instituting regulatory norms to govern the EV space in the future.
“At a certain point time in the future, there may be an appropriate ecosystem for enforcement of regulation towards electric mobility or other clean transport options. But as the present analysis shows, there are plenty of opportunities for accelerating adoption of electric vehicles through technological improvements and other interventions,” it said.
The report said that the projected sales of two-wheelers EV in the country could surge to 2.2 Cr units annually by FY31 in the optimistic scenario.
For such a scenario, battery costs should continue to fall at a compounded annual growth rate (CAGR) of 8%, vehicle performance should increase by 20% till FY24 and demand incentives should continue till FY31.
In the technology-driven scenario, where incentives are withdrawn post FY24, the battery cost is slashed annually by 8% and the performance of two-wheeler EVs is improved by 5% between FY24-FY26 and by 10% in FY27, the sales volume is projected to reach 21.02 Lakh units annually by FY24 and 1.79 Cr units by FY31.