Contrary to common belief, the trend of electric two-wheelers is growing in semi-urban and rural areas due to subsidised power that lowers the operating costs of an EV, said YS Chakravarti, MD and CEO of Shriram City Union Finance while interacting with a leading news agency.
A large portion of demand is coming from rural and semi-urban markets, despite the fact that overall two-wheeler sales have not yet reached their pre-Covid levels and that consumers are delaying purchases owing to greater operating costs as fuel prices have risen.
“One promising trend is being noticed is how electric two-wheelers are getting popular in rural and semi-urban India. There was a misconception that EVs would mostly be used in urban areas, but a significant portion of demand is coming from rural and semi-urban areas, especially rural India as electricity is subsidised there,” Chakravarti further said.
Even while people in tier II and tier III cities choose electric two-wheelers, it will still take some time before EVs can significantly challenge the sale of vehicles powered by internal combustion (IC) engines, he added.
Therefore, Chakravarti explained, “you won’t sense a large number out there till the production capacity is enhanced.” Two-wheeler, business, passenger, gold, and house loans are all provided by SCUF. The business is in the process of merging with Shriram Transport Finance Company, another non-banking financial institution in the Shriram group (STFC).
Although there were some encouraging signs for two-wheeler sales in June, overall sales are still down, he said, adding that they still haven’t reached pre-pandemic levels. In addition, the prices of two-wheelers have increased by roughly 20 per cent in the past 12 to 16 months and fuel prices have increased significantly, which is causing consumers to delay purchasing new vehicles, he added.
The peak for electric two-wheelers, according to Chakravarti, was around 50,000 each month, compared to an average of 9–10 lakh for IC engines. Therefore, he argued, there is a long way to go before this could actually bring a challenge to the IC engine vehicles.
RuralMarketing.in is now on Telegram. Click here to join Rural Marketing on Telegram and stay updated with the latest news and updates on rural business and the economy.