EV penetration in India could reach 40% by FY31: Ather
What's the story
Ather Energy, a leading electric vehicle (EV) manufacturer, has predicted that the penetration of electric two-wheelers in India could reach as high as 40% by FY31. The company made this projection in its annual report for 2024-25. The growth is expected to be driven by more launches in the segment, strong government support, and rapid infrastructure development.
Market dynamics
Legacy players entering EV space will boost growth
Ather Energy's report highlights the rapid growth of the Indian EV market, driven by both legacy players expanding their EV portfolios and new entrants ramping up capacity. The company believes that the entry of established brands into this space will provide a major boost to its growth story. Distribution expansion in the electric two-wheeler market is also expected to further accelerate sectoral growth.
Sales forecast
Projected growth rates for overall 2-wheeler sales
Ather Energy has projected that the overall two-wheeler sales in India will grow at a rate of 7% CAGR, reaching up to 30 million units by FY31. The company also predicts that the electric two-wheeler market will grow at an impressive 41% CAGR. In contrast, the internal combustion engine (ICE) market is expected to see moderate growth at just 2% CAGR.
Future outlook
Optimistic scenario projections for industry sales and EV penetration
In an optimistic scenario, Ather Energy predicts industry sales could grow at 8% CAGR, hitting 30-31 million units by FY31. In this case, EV penetration could rise to 40%, higher than the base case projection of 35%. The company also noted that electric vehicle penetration in scooters hit 16% in FY25.
Expansion strategy
Update on Ather Energy's 3rd plant in Maharashtra
Ather Energy has also shared an update on its third plant at Chhatrapati Sambhajinagar in Maharashtra. The first phase of the facility is already under construction and is expected to start production in phases during FY27. Once fully constructed, including both phases, the company's total installed capacity (including from the Hosur Factory) will be 14.2 lakh electric two-wheelers per year.