E-scooter sales may increase by 18% next yearImage Credit source: ai generated
The electric two-wheeler market, which was struggling with the challenges of supply shortage and decreasing subsidies for some time, is now ready to gain momentum again. According to a recent report, the next financial year i.e. FY27 may see an increase of 16 to 18 percent in the sales of electric two-wheelers. The biggest reason behind this rise is said to be the improvement in the supply of ‘rare-earth magnets’.
There will be relief by solving the supply problem
The latest CRISIL report shows that the bottlenecks in the supply of rare-earth magnets, which are considered the heart of electric motors, are now gradually being removed. The arrival of these magnets from China has started normalizing. This year (FY26), due to supply chain issues and confusion arising from reduction in GST rates on petrol vehicles, the growth of e-scooter was limited to 12-13%. However, now the situation is changing. Experts say that as the availability of magnets increases, the production of e-scooters will increase and the market will become stable. However, this growth will still be slightly less than the historical growth of 22% recorded in FY 2025.
Electric vehicle is much cheaper than petrol
Even though government subsidies are decreasing, driving an electric scooter is still much cheaper than a petrol vehicle. While petrol scooter costs Rs 2 to 2.5 per kilometre, electric scooter costs only 30 paise per kilometre. This is the reason that despite the reduction in subsidies, customers are getting attracted towards electric vehicles in view of the savings in the long run. It is expected that by next year the share of electric vehicles in total two-wheeler sales will increase to 7%, which is currently 5.5%.
Old players continue to dominate
Amidst this ongoing turmoil in the market, another big change is being seen. Old and veteran companies (Legacy Players) like Bajaj, TVS and Hero are defeating new startups (New-age players) in this race. By January 2026, the share of these old companies in the market has increased to 62%, which was 47% a year ago. The main reason for this is that the old companies also have a portfolio of petrol vehicles, due to which they can easily bear the risk. At the same time, new companies making only electric vehicles are suffering losses of Rs 25,000 to Rs 35,000 on each vehicle. Customer trust is also now leaning towards ‘service’ and ‘reliability’, where old brands are winning.