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5 Indispensable Marketing Elements to Ensure Success in the EV Two-Wheeler Market
24/06/2024
The future of transportation is undoubtedly electric, and this transformation extends beyond four-wheeled vehicles to the often-overlooked two-wheeler segment. Automotive market research shows that two-wheelers, which include mopeds, scooters, motorbikes, and motorcycles, account for about 30 percent of global mobility and are crucial in regions like China, South Asia, and Southeast Asia. With the rapid advancements in battery technology and increasing environmental awareness, the electrification of two-wheelers presents a significant opportunity for manufacturers. Comprehensive automobile industry analysis can reveal the factors that have been driving this massive shift. Through detailed automotive market analysis, EV companies can make sense of the growing consumer interest and the potential for significant market growth. In this regard, automotive market research consultants can help you figure out the strategic steps needed for companies to succeed in this space. To help you get started, let us explore the indispensable marketing elements needed to ensure success in the EV two-wheeler market.
Growth of the Global Electric Two-Wheeler Market
A recent automobile industry analysis has revealed that the global two-wheeler market is on a trajectory of substantial growth. The market is expected to continue growing at a projected compound annual growth rate (CAGR) of 8.7 percent through 2029, reaching a market value of approximately $218 billion. Although electric two-wheelers currently represent a small fraction of total sales, various automotive market research reports suggest that this number is set to change dramatically. For instance, in India, only about 4 percent of two-wheeler sales were electric in 2021, but global projections suggest that 30 percent of two-wheelers will be electric by 2030. This anticipated growth is driven by advancements in battery technology, falling battery costs, supportive regulatory environments, and changing consumer preferences.
The Rise of Electric Two-Wheeler Companies
As the electric two-wheeler market continues to expand, a diverse array of companies is making its presence felt. This surge includes four main types of players:
- Pure-play original equipment manufacturers (OEMs)
- EV upstarts
- Established incumbents, and
- Non-automotive conglomerates
Each of these groups brings unique strengths and strategies to the burgeoning electric two-wheeler sector. Let us discuss them in detail:
Pure-Play OEMs
Pure-play OEMs are companies dedicated solely to the production of electric vehicles. These manufacturers have the advantage of focusing all their resources and expertise on developing electric two-wheelers. They have been able to quickly innovate and introduce products that cater to the specific needs of various markets. For instance, pure-play OEMs in India and China have created cost-competitive products designed for local consumers' commuting habits and infrastructure. By tailoring their offerings to meet the distinct requirements of different regions, these companies have secured substantial market shares in a relatively short period.
EV Upstarts
EV upstarts are new entrants that have rapidly disrupted the traditional automotive landscape. These companies often bring fresh perspectives and innovative approaches to the market, leveraging cutting-edge technology and agile business models. EV upstarts are particularly adept at identifying and exploiting niche opportunities, such as high-speed electric scooters or advanced battery technologies. Their agility allows them to adapt quickly to market demands and regulatory changes, positioning them as formidable competitors to established brands.
Incumbents
Established automotive companies, or incumbents, are also entering the electric two-wheeler market, albeit at a slower pace. These companies have extensive experience, well-established brand reputations, and vast distribution networks. However, their transition to electric mobility has been more gradual due to the significant investments required to shift from internal combustion engines to electric powertrains. Despite this, incumbents are beginning to roll out electric models, leveraging their existing infrastructure and customer base to capture a share of the growing market. Their entry into the electric two-wheeler segment signals a broader industry shift towards sustainable transportation.
Non-Automotive Conglomerates
Non-automotive conglomerates are another group making inroads into the electric two-wheeler market. These companies, often with diverse business portfolios, see the potential of electric mobility as a lucrative addition to their existing operations. Leveraging their financial strength and cross-industry expertise, they are able to invest heavily in research and development, scale production quickly, and navigate regulatory landscapes effectively. Their entry adds an extra layer of competition and innovation, further accelerating the market's growth.
Market Dynamics and Competition
Automotive market research has shown that the competitive landscape for electric two-wheelers is becoming increasingly dynamic. This has been mainly because both traditional and new players are vying for market share. New entrants have made significant strides by offering cost-competitive products tailored for specific markets, particularly in countries like India and China where affordability and practicality are key. These companies have been able to respond quickly to consumer demands and regulatory changes, outpacing many traditional manufacturers in terms of innovation and market responsiveness. On the other hand, established brands are leveraging their extensive resources and industry experience to develop electric models, albeit at a slower pace. Their delayed entry into the market has allowed them to observe and learn from the successes and challenges faced by early adopters. As a result, when they do launch their electric two-wheelers, they often come with improved features, reliability, and brand trust. Amid such, new entrants must stay ready to face cutthroat competition. It is virtually impossible to compete and succeed in this dynamic environment if you don’t invest time and resources into automobile industry analysis. Automotive market research will allow you to figure out the key factors that your company can improve in order to become successful in the EV sector.
5 Success Factors in the Electric Two-Wheeler Market
Here we have explained the five factors that can lead to your success in the electric two-wheeler market segment:
Market Knowledge
Companies must recognize that current sales are fragmented and the market is still in its nascent stages. Success depends on offering localized products that cater to specific consumer needs. This involves identifying dominant use cases, TCO considerations, and product preferences across different regions. For example, while B2C consumers may prioritize home charging options, B2B users in logistics might prefer battery-swapping solutions for convenience.
Cost Control
Total cost of ownership (TCO) is a decisive factor for consumers when purchasing two-wheelers. Achieving TCO parity with internal-combustion-engine (ICE) counterparts requires a design-to-value approach. Battery costs, which account for 30 to 40 percent of the bill of materials, are a major consideration. Companies must decide between lithium iron phosphate (LFP) and nickel manganese cobalt (NMC) batteries, balancing factors like energy density, lifecycle, and thermal stability. Vertical integration in battery manufacturing can also provide flexibility, improved margins, and better quality control.
Building a Supportive Ecosystem
Creating a comprehensive ecosystem is essential for the success of electric two-wheelers. This includes developing reliable charging or swapping infrastructure, ensuring the availability of finance options, and providing robust after-sales support. OEMs should also focus on branding and customer engagement to build trust and familiarity. Initiatives like test drives, customer feedback sessions, and educational campaigns can help demystify electric two-wheelers and promote their benefits.
Sustainable Scalability
Sustainable practices in procurement and manufacturing are becoming increasingly important. OEMs should prioritize cell chemistries that are more amenable to recycling and reuse, and consider the environmental impact of materials like steel and aluminum. Additionally, leveraging policy support through demand and manufacturing incentives can help drive initial growth, but companies must prepare for a subsidy-free future by focusing on cost-saving measures and efficiency improvements.
Making EV Ownership Easy
Ease of ownership is a key factor in consumer adoption of electric two-wheelers. This involves providing seamless access to charging and swapping services, offering convenient financing options, and ensuring reliable after-sales support. Companies should also explore innovative solutions like over-the-air (OTA) updates for vehicle health diagnostics and performance enhancements. By making the ownership experience as hassle-free as possible, OEMs can encourage more consumers to switch to electric two-wheelers.
Final Word
The electrification of the two-wheeler market represents a significant opportunity for growth and innovation. Success in this rapidly evolving space requires a deep understanding of market dynamics. By addressing these key areas, companies can position themselves to thrive in the burgeoning electric two-wheeler market and contribute to a more sustainable future. This is where automotive market research plays a huge role. If you want to conduct an automobile industry analysis but don’t know where to start, look no further than Novus Insights. We possess over two decades of diverse experience and a track record of success in automobile industry analysis. Our team excels in providing effective solutions for clients' challenges. For more information on how our automobile industry research consultant can assist you, please don't hesitate to reach out to us at +91 1244142292, +91 7428225350, or via email at contactus@novusinsights.com. You may also fill out our contact form and our representatives will reach out to you at the earliest.
