India Battery Swapping for Electric Two-Wheelers Market Size

India Battery Swapping for Electric Two-Wheelers Market Analysis

The Indian battery swapping for electric two-wheelers market is expected to reach USD 27.14 billion, registering a CAGR of 18% over the next five years.

The COVID-19 pandemic had a mixed impact on the market during the first half of 2020. Due to the shutdown of manufacturing units and travel restrictions, sales of electric vehicles registered a decline. However, post the lockdown restrictions were eased, electric two-wheeler demand in India witnessed significant growth in 2020 and continued in 2021. With this increase in the adoption of electric two-wheelers, several players focused on the expansion of battery-swapping stations in major cities across the country.

Over the long term, the market is expected to grow due to factors like technological advancements in lithium-ion batteries, increased R&D expenditure by major players, and growing sales of electric two-wheelers across the world owing to emission norms. In addition, the Indian government has been focusing on battery swapping to improve the ecosystem for electric vehicles, leading to a positive outlook for the market.

For instance, in July 2022, the Indian government announced its plans of designing a roadmap to develop the required battery swapping and charging infrastructure along its highways as part of the efforts to propel a shift toward mass adoption of electric vehicles (EVs). The ministry has proposed that contracts for building charging centers include battery swapping stations.

Further, growing electric two-wheeler sales penetration also contributed to the growth of battery swapping stations in the country. Moreover, due to its impact on lowering the high upfront price of electric vehicles by decoupling battery ownership, battery-as-a-service (BaaS) is gaining traction in the battery swapping market. Such developments are expected to create an optimistic outlook for the market during the forecast period.

For instance, the Indian electric two-wheeler market noted a significant 206% year-over-year increase in September 2022, mostly due to increased public awareness and an incredible choice for consumers in all segments. For the calendar year (January - September), new electric two-wheeler registrations accounted for about 3.94% of the total new two-wheeler registrations in India. About 99,53,440 two-wheelers were registered, out of which 3,91,881 units were electrically powered.

While market expansion may be hindered by differences in battery technology and design, and the high initial setup and operational costs of battery swapping stations, the increasing usage of shared e-mobility, and the development of new and improved battery swapping models and services by market competitors are likely to provide the market with the opportunity to expand in the coming years.