Executive Summary
The global shift toward electric mobility continues its strong momentum in the first half of 2025, driven by a significant 28% increase in overall electric vehicle (EV) sales, which reached 9.1 million units. This robust growth, however, masks a more nuanced reality within the electric two-wheeler segment, which experienced a more modest 7.2% global increase during the same period.1 This disparity reflects a market facing regional saturation and evolving consumer preferences.
India has emerged as a central pillar of this transition. It has now surpassed China to become the world’s largest two-wheeler market and stands as the second-largest market for electric two-wheelers globally.2 Despite this prominence, a profound divide exists within India’s electrification efforts. The electric scooter segment has achieved a notable 15% market penetration, while electric motorcycles, which constitute two-thirds of the total two-wheeler market, have a negligible 0.1% penetration.4 This profound imbalance is a critical strategic vulnerability and a major barrier to achieving India’s national electrification targets.
To address this gap, NITI Aayog, India’s premier policy think tank, has initiated high-level discussions with major two-wheeler manufacturers such as Hero MotoCorp and Bajaj Auto.4 These meetings are focused on strategies to overcome the primary barriers to electric motorcycle adoption: high upfront costs, a nascent after-sales service and charging ecosystem, and lingering consumer anxieties related to range and reliability. This report provides a comprehensive analysis of the market dynamics, policy frameworks, and technological innovations shaping this crucial segment, concluding with strategic recommendations for industry leaders and policymakers to accelerate this vital transition.
Global Market Electrification: A H1 2025 Overview
The first half of 2025 presented a complex global picture for electric mobility. Global EV sales surged by 28% year-on-year to 9.1 million units, with major markets like China and Europe leading the charge.1 China alone accounted for 5.5 million sales, marking a 32% increase, while Europe contributed 2.0 million units with a 26% gain.1 This growth momentum indicates a broad-based shift in consumer behavior and a deepening commitment to electrification across key economies.
However, a closer look at the two-wheeler segment reveals a different narrative. Global electric two-wheeler sales grew by a comparatively lower 7.2% in the first half of 2025.2 This significant discrepancy between the overall EV market and the two-wheeler segment suggests that the broader electrification trend is being carried by other vehicle categories, such as electric cars, trucks, and buses. China, historically the dominant player in the electric two-wheeler space, still accounts for a massive 73% of global sales but has seen a recent downturn, with sales declining since 2023.2 Similarly, Europe’s electric two-wheeler market contracted by 2% in the first half of 2025, signaling potential shifts in momentum or market maturity.8
The performance of these historically strong markets underscores the strategic importance of emerging economies. India, for instance, is highlighted as the second-largest market for electric two-wheelers, with its growth propelled by new regulations and incentives.2 The rest of the world, including regions in Latin America and Africa, is also experiencing strong growth, indicating that the shift in mobility is finding its way to diverse and previously untapped markets.9 The analysis reframes the electrification effort from a uniform global trend to a targeted push to re-energize a specific vehicle segment that is lagging behind the broader EV transition.
Global EV Sales Snapshot (H1 2025 vs. H1 2024)
| Region | H1 2025 Sales (Units) | YoY Growth (%) |
| Global | 9.1 million | +28% |
| China | 5.5 million | +32% |
| Europe | 2.0 million | +26% |
| North America | 0.9 million | +3% |
| Rest of World | 0.7 million | +40% |
Data compiled from various market research sources.1
The Indian Two-Wheeler Market: A Strategic Crossroads
India’s two-wheeler market is a cornerstone of its transportation system, and its electrification is central to national decarbonization goals. With over 2.1 million EVs sold in the last 12 months, the market is on a robust growth trajectory.10 However, the overwhelming majority of sales still belong to internal combustion engine (ICE) vehicles, which hold approximately 88% of the total two-wheeler market share.11 This dominance is reflected in the sales charts, where traditional models like the Hero Splendor (267,607 units) and Honda Activa (181,948 units) remained the top-selling two-wheelers in June 2025.12
A profound disparity exists within this market, creating a significant strategic challenge. While electric scooters have successfully captured nearly 15% of their segment, electric motorcycles have achieved only a negligible 0.1% penetration.4 Government projections underscore this imbalance, suggesting that by 2030, electric scooters could account for 80% of sales in their category, while electric motorcycles may reach only 10%.4 This gap threatens to undermine India’s overall EV targets.
The electric two-wheeler market itself is consolidating around a few key players. In the first half of 2025, sales of electric two-wheelers surpassed 657,484 units, a 9.9% year-on-year increase.8 The market leaders—TVS, Bajaj, and Ola—together captured over 70% of the market share.12 Monthly sales data from July 2025 shows TVS leading with 22,230 units, followed by Bajaj with 19,650 units, and Ola Electric with 17,848 units.15
The low penetration of electric motorcycles is not merely a product gap but a systemic challenge rooted in the supply chain and historical market development. Electric scooters benefited from established models and supply chains from China, allowing Indian companies to get a head start in a familiar product category.4 In contrast, electric motorcycles lack this foundation, forcing manufacturers to build a completely new, parallel supply chain and manufacturing ecosystem from the ground up. This explains why India’s policy think tank, NITI Aayog, is holding specific high-level meetings with legacy manufacturers like Hero MotoCorp and Bajaj Auto.4 These companies dominate the ICE motorcycle market and are considered critical to solving this problem by leveraging their existing manufacturing capabilities and market presence to create a new ecosystem for electric motorcycles.
Indian Electric Two-Wheeler Market Share by Company (July 2025)
| Rank | OEM | Sales (Units) | Market Share (%) |
| 1 | TVS Motor Company Ltd. | 22,230 | 21.60% |
| 2 | Bajaj Auto Ltd. | 19,650 | 19.10% |
| 3 | Ola Electric Technologies Pvt Ltd. | 17,848 | 17.40% |
| 4 | Ather Energy Ltd. | 16,231 | 15.77% |
| 5 | Hero MotoCorp Ltd. | 10,489 | 10.19% |
| 6 | Greaves Electric Mobility Pvt Ltd. | 4,197 | 4.07% |
Source: EVreporter.com, July 2025 data.15
Policy and Regulatory Framework: Accelerating the Transition
India’s journey toward electric mobility is heavily influenced by a supportive, yet complex, policy environment. NITI Aayog has outlined a blueprint for the nation’s EV ambitions in its report, “Unlocking a $200 Billion Opportunity: Electric Vehicles in India”.16 In a direct effort to address the electric motorcycle gap, NITI Aayog’s recent meetings with industry leaders focused on key strategies to tackle the single biggest barrier: high upfront prices.4 The discussions centered on cost reduction, innovative financing models, and the implementation of battery swapping systems.4
The government’s commitment is further demonstrated through various incentive schemes. The PM E-Drive scheme, for instance, provides a subsidy of ₹2,500 per kWh for electric two-wheelers, with a cap of ₹5,000 per vehicle for fiscal year 2025-26.17 This program builds on the foundation laid by the FAME II scheme, which has been extended and revised to continue providing direct discounts on eligible vehicle purchases.18 Additionally, state-level incentives, such as road tax exemptions, have been crucial in reducing the total cost of ownership for consumers.17
Despite these supportive measures, the market faces a significant policy risk from external factors. A proposed GST cut on small ICE cars from 28% to 18% could have a profound, and unintended, impact on EV adoption.21 The current GST framework gives EVs a crucial price advantage, as they are taxed at a much lower 5%.4 If this tax differential narrows, consumers, who are highly price-sensitive, may lose the primary financial incentive to choose an EV over a familiar and reliable ICE model.21 Research from HSBC and Nomura has cautioned that such a move, while potentially boosting the broader automotive market, could inadvertently undermine the government’s own long-term EV transition goals and create a significant risk factor for investors and manufacturers.21
Technology and Innovation: Driving the Future of Mobility
The push for electric two-wheelers is being driven by rapid advancements in core technology, which are directly addressing the key pain points of potential buyers. At the heart of this innovation are battery and charging technologies. Innovations are focused on achieving higher energy density, with new battery chemistries offering 20% to 30% more capacity at lighter weights.24 This progress enables longer ranges without adding bulk, directly combatting range anxiety. Furthermore, ultra-fast charging solutions are becoming more prevalent, with some batteries capable of reaching 80% charge in under two hours, significantly reducing downtime and making EVs a more practical option for urban commuters.24
Beyond hardware, the integration of artificial intelligence (AI) is transforming electric two-wheelers into intelligent machines. New models are expected to feature AI-based riding assistance that offers a digital safety net for consumers. For example, systems are being developed for predictive maintenance diagnostics, which use real-time sensor data to warn of potential breakdowns before they occur.26 This approach mitigates consumer concerns about vehicle breakdowns and the reliability of a nascent service ecosystem. Similarly, AI-enabled smart trip routing can plan journeys by factoring in traffic, weather, and the location of charging spots, directly addressing the challenge of a limited charging infrastructure.28 Other applications, such as adaptive power modes that adjust motor output based on terrain and rider behavior, are enhancing performance and personalizing the riding experience.29
Key manufacturers are leveraging this technological momentum to build out their product portfolios:
- Hero MotoCorp: The company’s VIDA electric scooter brand saw a significant 200% sales growth in FY24-25, establishing it as a key player.31 In a strategic move to enter the high-margin electric motorcycle segment, Hero’s partnership with Zero Motorcycles is in the “advanced stage of developing a mid-sized performance electric motorcycle” with an expected launch in FY26.32
- Bajaj Auto: With its Chetak EV, Bajaj has secured a 21.8% market share in Q2 2025.34 The company has shown strategic agility by overcoming a critical rare earth magnet shortage through supply chain innovations and securing alternative sources, enabling it to scale production and meet rising demand.34
- Ola Electric: Already a market leader with a 34.8% share in FY24, Ola is expanding its portfolio beyond scooters.36 The company has launched its Roadster Series of electric motorcycles, with deliveries expected to begin in the first quarter of 2025.36 The Roadster is being offered at a competitive introductory price range of
₹99,999 to ₹1,39,999 depending on the variant and battery size.37 - TVS Motor: The TVS iQube scooter leads the market with strong sales momentum.8 The company has also made a strategic entry into the motorcycle segment with the launch of the e-Apache, positioning it as India’s first fully-faired electric motorcycle.41
Comparison of Key Indian Electric Motorcycles
| Model | Price Range (Ex-showroom) | Claimed Range (km) | Top Speed (km/h) | Key Features |
| Ola Roadster | ₹1,04,999−₹1,39,999 | 151-248 | 116-126 | AI-based riding assistance, multiple battery options, seamless connectivity, and sleek design. |
| Revolt RV400 | ₹1.24−₹1.40 Lakh | 150 | 85 | Swappable battery, urban commuter focus, and innovative financing models. |
| Ultraviolette F77 | ₹2.99−₹3.99 Lakh | Up to 323 | 155 | Aerospace-engineered design, high-performance motor, and advanced traction control. |
| Matter Aera | ₹1.83−₹1.94 Lakh | 172 | 105 | India’s first geared electric motorcycle with a 4-speed HyperShift gearbox. |
Data compiled from various public sources.38
Overcoming Barriers: A Multi-Stakeholder Approach
The successful mass adoption of electric two-wheelers in India, particularly electric motorcycles, hinges on overcoming several systemic barriers. The most significant of these is the high upfront cost, which is largely driven by the battery, representing up to 40% of the vehicle’s total cost.4 To address this, the industry is pioneering innovative financing and ownership models. The “battery-as-a-service” or battery leasing model is a profound strategic shift. This approach allows a consumer to purchase a vehicle without the battery, reducing the initial cost by 20% to 30%.44 This fundamentally transforms the battery from a large, depreciating capital expense into a predictable, variable operating cost, akin to fuel. This model not only lowers the financial barrier for buyers but also strategically addresses range anxiety by enabling quick and easy battery swapping, providing a solution that benefits consumers, manufacturers, and new service providers alike.44
Another critical challenge is the nascent state of the after-sales service and charging infrastructure. The lack of widespread, reliable service centers, a shortage of skilled technicians, and cumbersome insurance claim processes are major pain points for early adopters.43 Repairs for EVs, for instance, can take up to three months, a stark contrast to the hours it takes for minor repairs on ICE vehicles.43 This problem is a significant psychological barrier to adoption, as it erodes consumer confidence.
Manufacturers are taking concrete steps to address these issues. Ola Electric, for example, is making a significant investment by doubling its service network to 1,000 centers and has committed to training 1 lakh third-party mechanics by the end of 2025 to decentralize and scale its service capabilities.47 Similarly, major players are aggressively expanding their charging networks; Hero MotoCorp has expanded its fast-charging network to over 3,600 points across 250 cities, while Ather has more than 4,100 fast-charging points under its Ather Grid network.31 These investments, coupled with AI-powered predictive maintenance and diagnostic features, are designed to proactively solve problems before they arise, thereby reducing the burden on the physical service network and building trust with a new generation of consumers.
Strategic Outlook and Recommendations
The electrification of India’s two-wheeler market is a complex and high-stakes endeavor. While the electric scooter segment has shown remarkable success, the lagging electric motorcycle segment presents the market’s biggest strategic challenge. The outcome of this transition will depend on three critical success factors: the successful entry and scaling of electric motorcycles by legacy players, the stability and long-term vision of government policies, and the rapid expansion of the after-sales service and charging ecosystem.
Based on this analysis, the following recommendations are provided for key stakeholders:
- For Policymakers: A stable and long-term policy framework is essential to reduce market uncertainty. Policy efforts should be explicitly prioritized for electric motorcycles to address the 0.1% penetration gap and bring the market into balance. It is also crucial to avoid policies that could inadvertently erode the competitive advantage of EVs, such as a GST cut on ICE vehicles, which would weaken the primary financial incentive for consumers to switch to electric mobility.21
- For Manufacturers: Companies must continue to invest in product innovation that directly addresses consumer pain points. The integration of AI for predictive maintenance, smart navigation, and personalized riding is a strategic imperative that can provide a “digital safety net” and build consumer confidence in a nascent market. Aggressive investment in a decentralized after-sales service network and technician training is equally critical to reduce repair times and improve the overall ownership experience.46
- For Ecosystem Partners: Financiers and service providers should continue to scale innovative business models like battery leasing and battery-as-a-service to reduce high upfront costs, which remain a significant barrier for consumers.44 This systemic approach not only de-risks the purchase for the buyer but also creates new, profitable revenue streams for the entire value chain.
The electrification of India’s two-wheeler market is a profound narrative of policy ambition, technological innovation, and systemic challenges. The successful transition will ultimately be determined by the concerted efforts of all stakeholders to bridge the electrification gap in the motorcycle segment, ensuring that India’s path to a cleaner, more sustainable mobility future is both rapid and inclusive.
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