The prevalent hypothesis that is very common in the market is that the two wheeler ICE segment will likely be disrupted by electric vehicles as there are strong fundamental and growth figures to support that. The share of electric vehicles in the two wheeler segment (penetration ranges around 5-6%) has grown significantly in the last five years. In the past five years, the electric 2W sales have grown with a high CAGR of 80%. Although one could argue that this growth was supported by various incentives, even after the intensity of incentives has waned over past years, the sales figures are not showing dip as expected. Earlier dominated exclusively by startups such as Ola, Ather the sector is observing established entrants such as Hero Motocorp (Vida Brand), Bajaj, & TVS with significant investments across the sector. These major 2W ICE OEMs have already reserved their spot in top 5 ev selling companies, giving stiff competition to Ola and Ather. It would be critical to see how this trend plays out, once the third phase of the government ev incentives programme starts. PM E-drive (earlier FAME) will slash the 2W subsidy by half initially to INR 5000/KWH and will further cut it to INR 2500/KWH post October 2025 which is significant rollback from FAME II, during which EV sector showed tremendous growth.
From the above points it's easy to deduce that EV 2W has the strongest potential to be the next major disruptor. But it would be unwise to ignore the emergence of other technologies which have proven themselves earlier in the 4W segment- 'CNG'. Bajaj's recent launch of the world's first CNG-powered motorcycle offers a unique value proposition, addressing several concerns consumers have when considering electric 2Ws, including range anxiety. CNG 2Ws provide a cost-competitive alternative with better running costs than ICE (though not as good as EV), while offering dual-fuel flexibility for consumers who are hesitant to make a complete switch from ICE to EV. According to Bajaj, their current offering conservatively addresses approximately 35% of the total motorcycle market. Such size of TAM provides enough incentives for other OEMs to build their own CNG powered vehicles. TVS has already announced that they will be launching Jupiter's CNG version by next year. Although, CNG would face a similar challenge as EV while penetrating the market. India's CNG infrastructure is still very limited (7000 CNG stations across the countries) and almost half of it is concentrated in four states - Maharashtra, Gujarat, Uttar Pradesh and Delhi. There is a requirement of investments in building new CNG stations across the geography. The Indian Government, focusing on the gas economy push, intends to build almost 13,000 additional CNG stations by the end of 2032. This can provide a much needed push for 2W CNGs and wide market acceptance. Another hindrance in initial days could be public concerns over vehicle safety". It is understandable to have reservations about vehicle safety when it is unconventional to have a huge cylinder below the bike's seat. This issue would be resolved with time and efforts from brands to demonstrate their vehicle safety.
Apart from these possibly major trends, the two wheeler industry has shown its readiness for using flex fuels. Major 2W OEMs in India have demonstrated their ability to use flex fuel with ethanol blend of 85% or even higher. These vehicles have capability to run on almost any blend of petrol and ethanol mix. The success of these will largely depend on availability & price of such fuel as the efficiency of such vehicles is expected to be lower than conventional vehicles.
While the 2W hybrid market is still in its infancy, with only a few mild hybrid models available, companies like Hero and TVS have announced plans to enter the segment, signaling a potential shift in the market.
The future of 2W mobility is full of exciting possibilities, with electric, CNG, flex-fuel, and hybrid technologies all competing to define the next era.