India’s electric two-wheeler market surge by 22% in FY2026

India's electric two-wheeler (e2W) market grew by nearly 22 percent year-on-year in FY26, according to government data. Retail sales surpassed 1.35 million units, up from 1.11 million units in FY25. This growth occurred despite production challenges caused by a shortage of rare earth metals. The market saw significant shifts in leadership, with legacy manufacturers gaining ground over Ola Electric.

Key Highlights

• India's electric two-wheeler market grew by 22 percent in FY26
• Ola Electric's market share dropped from 22 percent to 5 percent year-on-year
• Bajaj Auto and TVS Motor became segment leaders with increased market shares
• Chinese export restrictions on rare earth metals disrupted EV production
• Festive season sales peaked at 140000 units in October

Market Share Shifts in FY26

Ola Electric, previously the market leader, experienced a sharp decline in sales and market share. In March, Ola Electric sold only 10,118 vehicles, representing a 5.4 percent market share. This is a significant drop from its 22.1 percent share in April 2025. For the full fiscal year, Ola Electric sold 164,000 vehicles, less than half of the 344,000 units it sold in FY25.

Bajaj Auto and TVS Motor emerged as the new leaders in the segment. TVS Motor increased its sales from just under 20,000 scooters in April 2025 to 49,484 units in March 2026. Its market share rose from 22.3 percent to nearly 27 percent. Bajaj Auto performed even better, leading the segment with a 28.5 percent share in March 2026, up from 21.4 percent in April 2025.

Ather Energy, a newer competitor, also expanded its presence. The company recorded 35,736 registrations in March 2026, achieving a 19.4 percent market share. This is an increase from 13,332 units and a 15 percent share in April 2025. Other companies, including Hero MotoCorp and Greaves Electric Mobility, also grew their market presence as Ola Electric's share declined.

Industry Challenges and Developments

The electric two-wheeler industry faced production challenges due to Chinese export restrictions on rare earth metals. These metals are essential for manufacturing permanent magnets used in electric motors. The restrictions caused import delays and increased the risk of production disruptions. Manufacturers responded by seeking alternative sourcing strategies.

Monthly e2W sales in FY26 averaged about 112,000 units, peaking at around 140,000 units in October. This surge was driven by festive demand during Dussehra and Diwali, when automakers offered discounts and financing schemes and increased production to meet higher demand.

Ola Electric attributed its decline to service-related concerns, quality issues, and rising customer dissatisfaction. The company reported an improvement in demand in late March, claiming daily orders exceeded 1,000 units. Ola Electric stated it has made operational changes, improved parts availability, and now services over 80 percent of vehicles on the same day.

Rare earth metals, a group of 17 elements, are crucial for high-tech applications such as electric vehicle motors, wind turbines, and electronics.

Conclusion

The sharp growth in India’s electric two-wheeler segment highlights the sector’s evolving dynamics, where innovation and brand trust drive consumer decisions. As newer players strengthen their portfolios and established brands expand capacity, the competitive landscape is set to intensify. For buyers, this rivalry ensures better technology, wider choices, and increasingly affordable electric mobility in the coming years.