How E2W Adoption In Tier 2 And 3 Cities Can Be Boosted Further Despite the growing demand of electric two-wheelers (E2Ws) in the Tier 2 and Tier 3 cities, the penetration is low and there several challenges which are hindering the further growth of E2Ws in these cities.
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In the bustling streets of India's tier 2 and tier 3 cities, a quiet revolution is taking place—one powered not by the roar of engines, but by the gentle hum of electric motors. As the world grapples with the urgent need to curb emissions and combat climate change, these cities are emerging as unexpected pioneers in the adoption of electric two-wheelers, heralding a new era of sustainable mobility.
India's metros often dominate the national discourse on electric vehicles (EVs). However, in recent years, the demand for EVs from tier-2 and tier-3 cities has also witnessed rapid growth.
According to Ather Energy, 54 per cent of their electric scooter sales come from Tier 2 and Tier 3 cities. As per the data from the two-wheeler maker, the range starting from INR 1.2 lakh, comes from Tier 2 and Tier 3 cities.
Based on sales per lakh population, the top five cities for the company are Calicut, followed by Kochi, Kolaphur, Trivandrum and Pune. Tier 2 cities account for 30 per cent of Ather Energy's sales and 24 per cent comes from Tier 3 cities.
Ravneet S Phokela, Chief Business Officer, Ather Energy had said, "As we are selling electric scooters starting from INR 1.3 lakh, we would have been concerned if their market was only in the metros. But our sales patterns clearly show that there is a large market in Tier 2 and Tier 3 cities where customers are ready to pay a premium for a quality product."
There are several factors that have converged to drive the rapid adoption of electric two-wheelers in these cities. Chief among them is the growing awareness of environmental issues and the need for cleaner, greener modes of transportation. However, if one looks in totality, the penetration is low.
Says Dinesh Arjun, CEO and Co-founder, Raptee, low penetration of E2W in these cities can be primarily attributed to several factors, including the sparse charging infrastructure, misconceptions about EV performance, limited dealership presence, and lower overall awareness compared to metropolitan areas.
Further, there are several challenges that are hindering the further growth of E2W in these cities.
Sulajja Firodia Motwani, Founder and CEO of Kinetic Green emphasizes the need for tailored, affordable, and durable EVs designed specifically for the Indian market. She underscores the vast potential of these regions for electric two-wheeler adoption and stresses the importance of building trust and affordability to tap into this market effectively.
Speaking to Entrepreneur, Sulajja said that the emergence of tier 2 and 3 cities as a pivotal market for electric two-wheelers in India is an exciting development. In these regions, value-conscious consumers are increasingly drawn to the substantial cost savings on fuel provided by electric vehicles, signaling a significant shift towards sustainable transportation.
However, she also highlights the persisting challenges in these cities including affordability and product suitability.
She said, "To cater effectively to this market, there is a pressing need for a more extensive range of 'Made-in-India, Made-for-India' products. Kinetic Green's new E-Luna is built to be long-lasting on all terrains and to be versatile for many applications- making it an attractive option for consumers in these cities."
She said that the fact that over 75 per cent of India's population resides in tier 2, tier 3, and rural markets underscores the immense potential for electric two-wheeler adoption in these areas.
"These regions represent a significant market opportunity, and their embracing sustainable transportation can drive substantial positive impact. By tailoring products to meet their needs, ensuring affordability, and building trust, the industry can tap into this vast potential and contribute to India's ambitious goal of achieving 30 per cent electric vehicle sales by 2030," Sulajja added.
Collaborative Efforts
Uday Narang advocates for collaborative efforts involving government intervention, industry players, and financial institutions to address challenges and promote sustainable transportation. He said "Improving the charging infrastructure stands out as a crucial step, as it addresses a major barrier to EV usage. Additionally, implementing EV-friendly policies can enhance affordability and accessibility, further incentivizing consumers to switch to electric vehicles. By working together with industry players, policymakers, and communities, significant progress can be made towards fostering a more sustainable transportation ecosystem."
He also said that collaborating with financial institutions to provide convenient loans and flexible payment plans can make electric two-wheelers more accessible.
Power Supply
Narang also highlights the importance of reliable power supply and suggests exploring swappable battery technology to alleviate range anxiety and improve charging convenience. He stresses the need for affordable EV models optimized for typical usage patterns in smaller cities.
"Several challenges hinder faster adoption in these regions. Infrastructure remains a significant bottleneck, with limited charging stations compared to urban centres. The unreliability of power supply in some areas raises concerns about consistent charging," he said.
He also said that despite subsidies, the cost of electric two-wheelers remains higher than traditional counterparts, and easier access to financing options is needed, especially in areas with less robust banking systems.
Range anxiety is a notable concern, with smaller batteries offering shorter traveling ranges, sometimes inadequate for certain use cases and rural commutes. Additionally, awareness and To increase penetration in tier 2 and tier 3 cities, the industry can adopt several strategic measures. Firstly, expanding the charging network is crucial, involving partnerships with local businesses and governments to set up charging stations strategically. Exploring swappable battery technology can reduce charging time and alleviate range anxiety. Offering affordable EV models with adequate range, optimized for typical usage patterns and affordability in smaller cities, is imperative, Narang added.
