Indian EV Manufacturers Slash Prices to Gain EV Market Share

Indian EV Manufacturers Slash Prices for Market Share Surge
Indian EV Manufacturers Slash Prices for Market Share Surge

by Tanushree Jaiswal Last Updated: Feb 26, 2024 - 05:27 pm 1.2k Views
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To capture a bigger share of the growing electric vehicle (EV) market several Electric Two Wheeler (E2W) manufacturers have announced price reductions on their models. This step intensifies competition with traditional petrol driven scooters which rely on Internal Combustion (IC) Engines.

Leading the charge Ola Electric, Ather Energy, Okaya EV and Chetak Technology (owned by Bajaj Auto) have all joined the trend. Ola Electric under the leadership of Bhavish Aggarwal slashed prices by up to ₹25,000 on its S1 Pro, S1 Air and S1X+ models leading to a surge in bookings.Ather Energy also joined in by cutting the price of its 450S model by ₹20,000, while Bajaj Auto's Chetak scooter also adjusted its pricing to become more competitive.

Reasons Behind Price Reductions

Despite challenges like range anxiety, higher acquisition costs compared to petrol vehicles and insufficient charging infrastructure the E2W sector has witnessed rapid growth. Sales surged by 26% to 81,608 units in January compared to the same period last year. However, electric scooters still represent only a small fraction accounting for 4.5% of the overall two wheeler market. Industry experts believe that the price reductions are the result of several factors. These include the decreasing costs of batteries, strategies to optimize expenses, efforts to localize production, and the integration of in house technology.

While these aggressive pricing strategies are expected to drive up volumes questions remain about their sustainability with profitability still a distant goal for E2W manufacturers.

Future Outlook and Challenges

Experts believe that sustained government subsidies, decreasing battery prices, and enhanced localization efforts will contribute to the long term viability of the EV sector. However, challenges such as charging infrastructure and consumer preferences also play a crucial role in shaping the market.

Despite increased affordability well established petrol scooter models like Honda Activa, Suzuki Access, and TVS Jupiter continue to dominate sales charts. Experts anticipate only a marginal impact on petrol scooter sales due to evolving consumer preferences and multifaceted purchasing decisions.

In the Electric Four Wheeler (E4W) space, Tata Motors has also taken steps to reduce prices. The Nexon EV's price has been slashed by up to ₹1.2 lakh with the long range version now starting from ₹16.99 lakh. Similarly, the Tiago EV’s price has been reduced by up to ₹70,000 with the base model now starting at ₹7.99 lakh. The reduction is attributed to the decrease in battery costs.

Final Words

As the electric vehicle (EV) industry keeps evolving, it's still uncertain how traditional car makers will adjust to these changes. Whether electric two wheelers can emerge as a formidable challenger to petrol driven scooters in India will depend on various factors including pricing, infrastructure and consumer preferences.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

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