Electric scooter makers cut prices significantly to grab EV market

Several Electric Two-Wheeler (E2W) manufacturers have announced substantial price reductions on their models in an attempt to capture the electric vehicle (EV) market, reported Moneycontrol.com.

Ola Electric led by Bhavish Aggarwal, decreased prices by up to ₹25,000 on its S1 Pro, S1 Air, and S1X+ models, leading to a hike in bookings. Similarly, Ather Energy slashed the price of its 450S model by ₹20,000. Amidst such competition, Bajaj Auto’s Chetak scooter is now being sold at more competitive price points.

As per the report, sales in E2W sector has surged by 26 per cent to 81,608 units in January as compared to the same month last year. However, electric scooters still constitute only a fraction of the sales, accounting for 4.5 percent of the overall two-wheeler market.

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Sale of electric and petrol-driven scooters

Popular petrol scooter models such as Honda Activa, Suzuki Access and TVS Jupiter continue to dominate sales charts despite the increased affordability of E2Ws.

Experts believe there will only be a marginal impact on petrol scooter sales due to evolving consumer preferences and the multifaceted nature of purchasing decisions.

While pricing of the scooters is an important aspect, factors like charging infrastructure, vehicle performance, and the overall ecosystem also influence consumer choices in the EV segment.

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Barriers for the EV industry

The report says that inadequate charging infrastructure is one of the significant hurdles faced by the EV industry. Other barriers are range anxiety, relatively higher acquisition costs compared to petrol-powered vehicles.

In order to face these challenges, some EV manufacturers have done price cuts ranging from 15-17 percent on their entry-level products. Industry observers are attributing the price cuts to various factors, such as falling battery costs, cost optimisation strategies, increased localisation, and vertically integrated in-house technology.

Sustained government subsidies, reductions in battery prices, and enhanced localisation efforts are expected to enhance the long-term viability of the EV sector.