Rare-Earth Supply Boosts India's Electric Two-Wheeler Growth

Supply chain improvements in rare-earth magnets are expected to drive a 16-18% increase in India's electric two-wheeler market next fiscal year, according to Crisil Ratings. This comes after a slowdown to 12-13% growth this fiscal year, affected by supply disruptions and GST adjustments.

In the previous fiscal, electric two-wheeler growth stood at 22%, but a shortage of magnets and GST changes hindered progress. Crisil Ratings Senior Director, Anuj Sethi, noted that easing supply conditions and revised pricing have helped recent recoveries.

Legacy original equipment manufacturers (OEMs) have gained market share, now at 62%, due to stronger dealer networks and robust supply chains. Despite challenges, electric models maintain cost advantages over internal combustion engines, even as government incentives diminish.