How India’s Best 2-Wheel EV Stocks Generate Power Forward

TVS Motor has sold more than 5,000 units of iQube during the financial year.

Back in August 2021, we wrote to you about how the Indian 2-wheeler EV market is growing rapidly.

We wrote about the top 3 listed players trying to gain market share and win an electric two -wheeled battle.

In this article, we will discuss the latest developments in this regard. We will also cover important updates on how Indian firms are managing the growing demand in the EV scooter market.

Every day, there are new discoveries in the field of electric transportation. In fact, it seems to be a highly coordinated effort by carmakers, battery manufacturers, R&D labs and the government to promote EVs as the new mobility avatar and make them dominant.

The government has set a goal to shift from new sales of ICE (Petrol & Diesel) vehicles to 100% plug-in electric vehicles by 2030. It also aims to transform India into a global EV manufacturing hub.

Around 20 states in India have already produced either a draft or a final state -level EV policy, to promote India’s transition from ICE to EV.

Almost every state policy has emphasized the need for two- and three -wheelers, public transit, and job growth.

Let’s take a look at what India’s leading two -wheeler EV firm has done in the meantime.

1. Wira MotoCorp

Hero MotoCorp, formerly also known as ‘Hero Honda’ was one of India’s first motorcycle manufacturers.

The company is the largest manufacturer of two wheels in the world. In India, it has a market share of about 37.1% in the two-wheeler industry.

In a recent development, Hero MotoCorp said it will make its long-awaited entry into the country’s fast-growing electric vehicle market in July through the Vida brand.

The new brand will house the New Delhi -based automaker’s mobility initiatives, including the launch of the upcoming two -wheeled electric vehicle.

Delivery of the first product to customers will begin later this year. The company will manufacture the electric vehicle at a plant in Chittoor, Andhra Pradesh.

The MotoCorp Hero announcement was also made amid ongoing arbitration with rival Hero Electric over the use of the former ‘Hero’ brand name for its EV.

Last year, the company announced a partnership with Taiwanese two -wheeler maker and battery exchange infrastructure provider Gogoro. They will jointly develop an EV powered by the Gogoro convertible solution in Indian and form a battery switching joint venture.

Hero MotoCorp has already entered a two -wheeled EV in the form of an investment in Bengaluru -based EV startup company, Ather Energy.

Recently, the company’s shares came under pressure after the Income Tax Department detected false expenditures of up to Rs 1,000 crore made by the company.

However, the company later clarified it had provided all documents and data to the authorities and denied the press report. This caused its shares to rise almost 3% today.


2. Motor TVS

TVS Motor manufactures a wide range of two -wheeled vehicles from mopeds to racing -inspired motorcycles. The company also manufactures three -wheeled vehicles.

It has an annual production capacity of 4 million two -wheelers and 1.2 lakh three -wheelers.

Last month, TVS Motor said it planned to expand its electric two -wheel capacity and charging infrastructure. It is preparing for the sale of its electric scooters in pan-India

The company will also launch new products and bring its two -wheeled electric vehicles to the global market soon.

During the company’s earnings call, KN Radhakrishnan, Director & CEO, TVS Motor said,

Our iQube electric scooters continue to receive good response. We have over 6,000 bookings so far.

Despite the challenges in the electronic spare parts supply chain, we have been able to increase production and sales month by month. We are engaged in discussions with major suppliers for long -term arrangements for spare parts.

Currently, iQube is on sale in 33 cities. The company is also working to reach nationwide by the end of this financial year.

TVS Motor has sold more than 5,000 units of iQube during the financial year. The company is also thinking of launching it in the international market.

TVS Motor is working on a set of electrical products targeting a different set of buyers in the two and three wheel segments.

The company also strives to offer an extensive and reliable charging infrastructure across India. It is in the process of working with an infra charger firm.

The company hopes its infra -charging partners such as Tata Power and CESL (Energy Convergence Services) will significantly improve customer comfort.

In December 2021, the company also announced its relationship with the BMW Group. TVS Motor Company said it will develop EVs with the BMW motorcycle brand in India.

The two partners intend to jointly develop an electric vehicle platform to produce a range of two -wheel EVs – from scooters to motorcycles as well as new concepts.


3. Bajaj Auto

Bajaj Auto is an Indian multinational two- and three -wheeler manufacturing company based in Pune.

It manufactures motorcycles, scooters, and car tricycles. The company has factories in Chakan, Waluj, and Pantnagar. Akurdi’s oldest plant in Pune houses an ‘Ahead’ R&D center.

Recently, Bajaj Auto proposed to invest more than Rs 1,000 crore, including investment in new units for EVs, under a production-linked incentive (PLI) scheme.

The company has applied for a PLI scheme where Rs 1,000 crore of investment will be made over the next five years.

The proposed investment expenditure will include an investment of Rs 300 crore in a new unit at the Pune plant complex, which will have a production capacity of half a million a year for electric two -wheelers.

The first vehicle is expected to launch in June. It also claims to have a production capacity of 5 lakh units per year.

The company sold about 2,000 units of its two-wheeled electric Chetak in the December 2021 quarter, while the order book for Chetak totaled about 10,000 units. Currently, Chetak is sold in eight cities. It is eyeing a pan-Indian penetration in 9-12 months.

Please see the company’s share price performance over the past twelve months.


India’s electric vehicle ecosystem and investment prospects

Regardless of the country’s big goals, India’s EV sector is at a whole new level.

However, India is the world’s largest untapped market, especially in the two -wheeler category. In addition, 100% foreign direct investment is allowed in this sector.

The government is also pushing for a shift to clean transportation, as seen by recent changes to the Faster Use and Manufacture of Hybrid and Electric Vehicles in India (FAME) II plan to make electric two-wheelers more affordable.

Several PLI schemes aim to create a local manufacturing ecosystem to support goals related to increasing the use of electric mobility transport.

This is expected to be achieved by promoting new investments in local supply chain development for key technologies, goods and car components.

Moreover, several Indian states have recently enacted EV regulations to encourage investment and make the use of EVs more attractive to consumers.

Taking into account all these factors, we can say India is heading in the right direction. Going forward, this will create more investment opportunities in the stock market.

Check out the chart below to see the growing opportunities in a 2-wheel EV.


This is what Smallcap Chief Analyst at Equitymaster, Richa Agarwal, wrote about this…

Over the past five years, two -wheeler sales in India have been around 2 crore units a year. Now the sector is cyclical and has been in recession for some time. So let’s consider a modest 5% growth for the next 10 years.

By 2030, we are looking at 2-wheeler sales of 3 crore units. While a third of this is EV sales, that’s 1 crore of 2-wheel electricity a year.

In the last 2 years, the average sales of 2 electric wheels is 1.5 lakh units. From 1.5 lakh to 1 crore, that’s a 66x double chance in a 2-wheel EV.

This is an annual growth rate of 52% over the next 10 years. It is an almost vertical growth opportunity.

According to Richa, this is like a gold rush. But like any gold rush, the winners will only be a few.

If you plan to invest in EV stocks, the underlying value and prospects of the business. Ongoing research should not be compromised even when there are positive possibilities.

Happy Investing!

Disclaimer: This article is for informational purposes only. It is not a stock proposal and should not be treated as such.

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