Will global sales of electric two-wheelers reach 100 million units
Global sales of electric two-wheelers are recovering after the coronavirus pandemic, according to the report. Since 2021, the industry has seen marginal growth as electrification has progressed. By 2027, more than 100 million new electric two-wheelers are expected to be on the road worldwide.
Table of Contents
Distribution and analysis of the global two-wheeler market
By the end of 2022, global two- and three-wheeled vehicle ownership is estimated at 292.4 million. Most of them can be in China and India. Despite this, African countries have seen a significant increase in sales. Indonesia and Vietnam also have a large number of two – and three-wheelers.
Two-thirds of electric vehicle sales in China accounted for 49% of the total market in 2022, mainly because China is both a market leader in volume sales and a global leader in vehicle electrification, even as other countries continue to pick up pace in electrification of new vehicle sales.
In 2021, China accounted for 53% of global two-wheeled vehicle sales, with electric vehicles accounting for a staggering 70%. China’s early dominance in the battery supply chain and the development of China’s manufacturing industry are the primary drivers for the country to control the industry.
China produces a large number of electric two-wheelers for the Chinese market, while also exporting to neighboring countries, though with the shift to electrification and subsidies for Chinese manufacturing, some regions have become more independent.
In 2021, 13.6 million 2/3 wheel vehicles were sold in India, of which 1% were electric vehicles. In 2022, 15 million units will be sold, of which 5% will be electric. Before the outbreak, 21 million cars were sold in 2019, but few of them were equipped with electric motors. The Indian government believes it has the right incentives in place to continue achieving 5% growth through 2023.
Due to the lack of Chinese car manufacturing infrastructure in India, most sales of two-wheeled electric vehicles in India are imported from China. This is set to change over the next decade or so thanks to policies such as the $3.5 billion production-linked Incentive (PLI), which provides subsidies to Chinese manufacturers based on electric vehicle output.
As startups such as OLA and traditional internal combustion engine manufacturers such as Hero join the revolution to expand the production of electric two – and three-wheeled vehicles, India will be largely self-reliant by 2026. In Vietnam, Honda and Yamaha have lost market share in internal combustion engine vehicles to electric vehicle startups such as Vinfast, Pega, Anbico, DK Bike and Detech.
According to statistics, by the end of 2022, Vietnam has nearly 2 million newly registered electric motorcycles, accounting for 2.7% of the total number of motorcycles in the country. “Electric motorcycle sales will increase by 30-35% in 2022 compared to 2021.
Although Honda and Yamaha dominate the Vietnam market with a share of about 90% (2020 data), their share is eroding, falling by about 7% and 10% (2021 data) respectively. These numbers are expected to have changed as the market is rapidly moving towards local production of electric vehicles.
Although the penetration rate of electric vehicles will reach 10% by 2021 and is expected to climb further as battery prices continue to fall and demand continues to increase, neither Honda nor Yamaha have electric two-wheelers in the Vietnamese market. The failure of existing manufacturers to adapt to changing market dynamics will be a key factor in this market and is likely to be replicated in the four-wheel electric vehicle market.
Global two-wheeler sales trends
Most of the global growth in electric two-wheelers is expected to occur in India, Indonesia and Vietnam. India will remain the only significant factor in demand for three-wheeled vehicles. South America and Africa are likely to expand their electric two-wheeler fleets by importing vehicles from China and Southeast Asia. As demand increases, local manufacturing is expected to take root.
Demand growth is likely to be small in Europe, North America, Australia or New Zealand due to cold weather, long driving distances and a culture that values car ownership more. Still, local companies such as Benzini in Australia are making small inroads with their new Sport.
Many Europeans and North Americans are encouraged to cycle in crowded cities and will increasingly turn to two wheeler electric bike. Australia’s capital cities are building bike lanes for inner-city residents.
As the market shifts from lead-acid batteries to low-cost lithium batteries such as lithium iron phosphate (LFP) batteries, the price of two-wheeled electric vehicles is expected to decline. The advent of sodium-ion batteries later this decade will drive the necessary price reductions to continue driving demand.
Due to the relatively low range requirements achieved by battery exchange systems and the need to keep costs low in this market, battery manufacturing demand is expected to increase from 71GWh today to 228GWh by 2030, assuming an average battery carry charge of 2.5kWh. In addition, top 10 battery swapping station manufacturers in China such as RACEnergy and GOGORO charging station, are pioneering a new way, battery swapping station, to consider range requirements and battery sizes.
With the expansion of the four-wheel electric vehicle market, the price of lithium carbonate may face some upward pressure, which may affect the manufacturing of two-wheel electric vehicle batteries. Such fluctuations are expected in the middle of the decade.
Nonetheless, lithium iron phosphate batteries will replace the use of lead-acid batteries in the vast majority of use cases once costs fall further, which is expected to happen after 2025/2026 as expansion of lithium mining and processing capacity catches up with demand. Once China’s production reaches a sizable volume, and costs begin to come down as the manufacturing process matures, sodium batteries will also become competitors in a decade.
Global battery demand trends for electric two-wheelers
Interoperability between two-wheeler manufacturers will facilitate motorcycle battery replacement infrastructure and battery-as-a-service agreements. In this case, low-range batteries won’t be such a problem. In fact, it may be the cheaper option that can make more progress in electrifying the fleet.
Someone will question whether electric two-wheelers won’t make much of a difference if India and China continue to rely on coal-fired power. However, the Renewable Energy Ecosystem Observer commented that India and China are the two countries with the highest number of solar and wind power plant installations. The entire system is being developed together to promote two-wheeled electric vehicles towards 100 million sales scale.
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Will global sales of electric two-wheelers reach 100 million units
Distribution and analysis of the global two-wheeler market
By the end of 2022, global two- and three-wheeled vehicle ownership is estimated at 292.4 million. Most of them can be in China and India. Despite this, African countries have seen a significant increase in sales. Indonesia and Vietnam also have a large number of two – and three-wheelers.
Two-thirds of electric vehicle sales in China accounted for 49% of the total market in 2022, mainly because China is both a market leader in volume sales and a global leader in vehicle electrification, even as other countries continue to pick up pace in electrification of new vehicle sales.
In 2021, China accounted for 53% of global two-wheeled vehicle sales, with electric vehicles accounting for a staggering 70%. China’s early dominance in the battery supply chain and the development of China’s manufacturing industry are the primary drivers for the country to control the industry.
China produces a large number of electric two-wheelers for the Chinese market, while also exporting to neighboring countries, though with the shift to electrification and subsidies for Chinese manufacturing, some regions have become more independent.
In 2021, 13.6 million 2/3 wheel vehicles were sold in India, of which 1% were electric vehicles. In 2022, 15 million units will be sold, of which 5% will be electric. Before the outbreak, 21 million cars were sold in 2019, but few of them were equipped with electric motors. The Indian government believes it has the right incentives in place to continue achieving 5% growth through 2023.
Due to the lack of Chinese car manufacturing infrastructure in India, most sales of two-wheeled electric vehicles in India are imported from China. This is set to change over the next decade or so thanks to policies such as the $3.5 billion production-linked Incentive (PLI), which provides subsidies to Chinese manufacturers based on electric vehicle output.
As startups such as OLA and traditional internal combustion engine manufacturers such as Hero join the revolution to expand the production of electric two – and three-wheeled vehicles, India will be largely self-reliant by 2026. In Vietnam, Honda and Yamaha have lost market share in internal combustion engine vehicles to electric vehicle startups such as Vinfast, Pega, Anbico, DK Bike and Detech.
According to statistics, by the end of 2022, Vietnam has nearly 2 million newly registered electric motorcycles, accounting for 2.7% of the total number of motorcycles in the country. “Electric motorcycle sales will increase by 30-35% in 2022 compared to 2021.
Although Honda and Yamaha dominate the Vietnam market with a share of about 90% (2020 data), their share is eroding, falling by about 7% and 10% (2021 data) respectively. These numbers are expected to have changed as the market is rapidly moving towards local production of electric vehicles.
Although the penetration rate of electric vehicles will reach 10% by 2021 and is expected to climb further as battery prices continue to fall and demand continues to increase, neither Honda nor Yamaha have electric two-wheelers in the Vietnamese market. The failure of existing manufacturers to adapt to changing market dynamics will be a key factor in this market and is likely to be replicated in the four-wheel electric vehicle market.
Global two-wheeler sales trends
Most of the global growth in electric two-wheelers is expected to occur in India, Indonesia and Vietnam. India will remain the only significant factor in demand for three-wheeled vehicles. South America and Africa are likely to expand their electric two-wheeler fleets by importing vehicles from China and Southeast Asia. As demand increases, local manufacturing is expected to take root.
Demand growth is likely to be small in Europe, North America, Australia or New Zealand due to cold weather, long driving distances and a culture that values car ownership more. Still, local companies such as Benzini in Australia are making small inroads with their new Sport.
Many Europeans and North Americans are encouraged to cycle in crowded cities and will increasingly turn to two wheeler electric bike. Australia’s capital cities are building bike lanes for inner-city residents.
As the market shifts from lead-acid batteries to low-cost lithium batteries such as lithium iron phosphate (LFP) batteries, the price of two-wheeled electric vehicles is expected to decline. The advent of sodium-ion batteries later this decade will drive the necessary price reductions to continue driving demand.
Due to the relatively low range requirements achieved by battery exchange systems and the need to keep costs low in this market, battery manufacturing demand is expected to increase from 71GWh today to 228GWh by 2030, assuming an average battery carry charge of 2.5kWh. In addition, top 10 battery swapping station manufacturers in China such as RACEnergy and GOGORO charging station, are pioneering a new way, battery swapping station, to consider range requirements and battery sizes.
With the expansion of the four-wheel electric vehicle market, the price of lithium carbonate may face some upward pressure, which may affect the manufacturing of two-wheel electric vehicle batteries. Such fluctuations are expected in the middle of the decade.
Nonetheless, lithium iron phosphate batteries will replace the use of lead-acid batteries in the vast majority of use cases once costs fall further, which is expected to happen after 2025/2026 as expansion of lithium mining and processing capacity catches up with demand. Once China’s production reaches a sizable volume, and costs begin to come down as the manufacturing process matures, sodium batteries will also become competitors in a decade.
Global battery demand trends for electric two-wheelers
Interoperability between two-wheeler manufacturers will facilitate motorcycle battery replacement infrastructure and battery-as-a-service agreements. In this case, low-range batteries won’t be such a problem. In fact, it may be the cheaper option that can make more progress in electrifying the fleet.
Someone will question whether electric two-wheelers won’t make much of a difference if India and China continue to rely on coal-fired power. However, the Renewable Energy Ecosystem Observer commented that India and China are the two countries with the highest number of solar and wind power plant installations. The entire system is being developed together to promote two-wheeled electric vehicles towards 100 million sales scale.