When electric scooters beat the Bullet, it’s a sign of things to come

Eicher Motors Ltd, the parent company of Royal Enfield, announced sales of over 1 million motorcycles last year—its best in over a century of existence. Last year, electric two-wheeler makers in India sold 1.14 million units, passing the million-units milestone for the first time. Enfield’s sales grew 11% over the past year, while overall electric two-wheeler sales in India grew 21% in that same period.

The numbers compare well against the 6% growth of India’s biggest two-wheeler maker, Hero MotoCorp, which sold 5.9 million units in 2024-25, and the 8% growth of India’s overall two-wheeler industry, which ended the financial year with sales of more than 20 million units, matching the record set in FY18.

Enfield’s motorcycles cost at least twice as much as Hero’s entry-level motorcycles. Electric scooters are beginning to be priced at levels comparable to India’s biggest selling scooter brand, Activa, manufactured by Honda Motorcycle and Scooter India. Ola Electric Mobility Ltd’s is cheaper than an Activa.

All these point to two clear takeaways:

1. Seen against the slowing sales of Hero’s entry-level motorcycles, there is considerably better demand for premium two-wheelers in India.
2. Given the growing price parity with traditional vehicles powered by internal combustion engines, the shift to electric two-wheelers is set to gather pace over the next few years.

Premium demand

Though record exports helped Enfield achieve its milestone, much of its incremental sales came from upgraded and more expensive models it launched in India last year.

Enfield’s biggest growth drivers last year included the launch of its upgraded off-road motorcycle Himalayan with a bigger engine, and the Meteor, a cruiser built on Enfield’s stock 350-cc engine but priced at a 15% premium to the base models.

Last week, Royal Enfield launched the Classic 650, priced at ₹3.37 lakh, one of its most expensive motorcycles.

Investors seem to have endorsed Enfield’s strategy. Its stock trades at a price-to-earnings ratio of 32.9, higher than Hero’s 18.2 and Bajaj Auto Ltd’s 29.6, although TVS Motors Ltd trades at a much higher 58.9.

Incidentally, TVS has not only made significant inroads into the 250-cc motorcycle market in which Enfield is the clear leader, but is among the earliest movers in India’s electric two-wheeler market.

Electrifying two-wheelers market

Electric models have invigorated India’s scooter market, becoming the fastest-growing segment in the domestic two-wheeler industry. Scooter designs are more amenable to fitting heavy batteries without having to alter the balance of the two-wheeler.

Bajaj Auto, a late entrant to India’s electric scooter market with the launch of its revamped Chetak four years ago, sold the highest number of electric scooters in the country last month, and was only 6,000-odd electric scooters shy of wresting the No.1 position from TVS Motors.

Growing demand for electric scooters helped India’s overall scooter sales grow 16% in FY25, twice as fast as the overall two-wheeler industry. There is more coming. Honda’s electric scooter is expected to be available in the market shortly.

Thanks to China, global battery prices are weakening, which is expected to make electric scooters more affordable. Battery contributes to over 40-60% of the cost of an electric scooter.

An ex-HDFC Mutual fund manager who took an early bet on Hero MotoCorp and later on TVS Motors said India’s two-wheeler is seeing a big disruption with growing electric vehicles sales. “Hero grew to the No.1 position (in overall two-wheeler sales in India) by promising fuel efficiency. If you consider the fact that electric vehicles will further that promise, we are going to see some new winners,” the fund manager said.