As EV sales rise, India’s inadequate e-2W after-sales ecosystem risks undermining policy gains—urgent support for skilling and servicing is key
Image Source: Getty
India, China, and the Association of Southeast Asian Nations (ASEAN) countries are the biggest two- and three-wheeler (2/3W) markets globally. With sales of 2/3Ws far outnumbering sales of Light Motor Vehicles (LMVs), electrifying 2/3Ws presents an important opportunity for decarbonising mobility and improving urban air quality in these countries. In 2023, about 30 percent of the 2/3W sales in China were electric, followed by India at 8 percent, and the ASEAN countries at 3 percent.
In India, sales of electric 2W (e-2W) in 2023 stood at 0.94 million units, about 40 percent higher than in 2022. In 2024, the figure was 1.15 million. The rapid growth in India is due to strong policy support for EV deployment, such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) and FAME II measures. The FAME scheme was launched by the Government of India in 2015 to support 280,000 electric/hybrid vehicles, including buses, and 520 charging stations. FAME II was introduced in 2019 as a three-year purchase incentive policy. FAME II came to an end on 31 March 2024 and was replaced by a new four-month subsidy extension scheme called the Electric Mobility Promotion Scheme (EMPS), announced in March 2024, with outlays of over INR 4.9 billion to subsidise e-2/3W purchases. The EMPS was meant to support the roll-out of 372,15 additional e-2/3Ws equipped with Li-ion batteries. EMPS was subsequently extended until 30 September 2024 to support 560,789 e-2W/3Ws.
The rapid growth in India is due to strong policy support for EV deployment, such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) and FAME II measures.
Other policies, such as the supply-side incentives under the Public Linked Incentive (PLI) scheme, the Goods and Services Tax (GST), and Regional Transport Office (RTO) tax rebates, with India’s Go Electric campaign, have bolstered the e-2W uptake. However, the upfront purchase price is around 30 percent higher on average than the petrol equivalent.
Data derived from the Vahan portal shows that the subsidy schemes pushed EV penetration to 7.5 percent, showcasing a Compound Annual Growth Rate (CAGR) of 54 percent since 2018 (Fig 1). Further, the data shows that the growth of e-2w has been significant, reaching 61 percent of total EV sales in 2022, with a CAGR of 86 percent since 2018 (Fig 2). By 2030, sales of e-2W are expected to touch 22 million. By then, however, unless addressed, cracks in the after-sales and auto repair ecosystem would be too wide to sustain the rapid transformation. There are lessons to be learnt from the Chinese experience.
Source: Vahan
In China, more than half of all new car sales are EVs, whereas the first wave of EVs is now running out of warranty. Only a few repair shops are equipped to handle EVs, and consumers are facing long wait times for out-of-warranty maintenance. The maintenance service structure for EVs is still in its infancy stage and has been unable to match the performance of the traditional fuel vehicle market.
Source: Vahan
In India, independent repair shops for e-2Ws have yet to materialise, and consumers are currently relying on dealerships for sales, spare parts, and service or authorised service centres. The reliability of such service centres is rather poor. India’s top e-2W Original Equipment Manufacturer (OEM) was recently in the news due to over 10,000 unresolved complaints. According to Reuters, India's consumer rights agency sent a notice to the OEM seeking an explanation. Consequently, compared to the year 2024, the market share of the particular OEM fell by 4.74 percent.
Based on secondary research and user experience of more than 50,000 km of e-2W from OLA Electric Mobility, Bajaj Auto, and Hero MotoCorp, the following after-sales service issues have been identified:
E-2W performance is managed by a software platform that also serves as the user interface (UI). Malfunctioning of the software platform affects the operability of the e-2Ws and poses multiple challenges for the users. There are instances of delayed or no warning leading to abrupt seizure of the electric powertrain and/or its other functionalities.
Additionally, most of the e-2Ws is managed using a mobile phone application during their after-sales service. A separate stack (or interface) is used by the service network personnel and the e-2W users. Disruptions in connectivity or software crashes lead to a complete service halt. This, coupled with software glitches and delays from the service centre to update empty slots onto the Customer Relationship Management (CRM) based software platforms, leads to a delay in service booking.
Today, only dealers and exclusive showrooms provide after-sales service. Due to warranty, after-sales maintenance and servicing have to be carried out at authorised service centres, which are limited in number. This leads to longer waiting times and poor access to service centres. Even in China, with a more mature EV market than India, there are 397,000 repair shops for fossil fuel-powered vehicles compared to only 20,000 specialising in EVs.
Due to warranty, after-sales maintenance and servicing have to be carried out at authorised service centres, which are limited in number. This leads to longer waiting times and poor access to service centres.
Unlike conventional 2Ws, e-2Ws run on complex electrical systems. Fixing them requires mechanical know-how, precision tools, rigorous testing, and an entirely new skill set. Given that training programmes are costly, time-consuming, and often outdated before the technician hits the shop floor, technicians are not adequately equipped to address maintenance and servicing challenges. Insufficient real-life learning has left technicians woefully underprepared to deal with a technology that requires reading circuit diagrams, taking measurements, and expertise in high-voltage systems. This is a Catch-22 for the industry as there are not enough skilled technicians to meet growing demand, and not enough vehicles on the road to draw them out yet.
Issues such as battery draining faster after a certain km run are common. This can also be attributed to user behaviour and charging patterns. However, even with a warranty, customers have to wait for months for a faulty battery replacement. In case of one of the OEMs, instead of a DC/DC converter, there is an auxiliary 3Ah-12V lead acid battery that is used to switch on the scooter and run the essentials, such as lights and dashboard. Without it, the e-2W simply shuts down, irrespective of the state of the main battery. With no indicator for this auxiliary battery, it is impossible to know its health and state of charge. Based on user experience, this battery needs replacement after about 6,000 km of use and costs around INR 1200/per unit. Not only is this an additional cost for the customer, but it also adds to the inconvenience of the user. Additionally, according to Michelin, tyres of EVs wear out up to 20 percent faster due to the instantaneous torque of electric motors and the weight of the battery. This is more pronounced for e-2Ws with drum brakes, as per user experience.
E-2W maintenance and servicing necessitates investment in expensive high-voltage precision equipment and skills in short supply.
Unlike a fossil fuel vehicle with about 2,000 moving parts in the drivetrain, EVs have only 20. Additionally, a fossil fuel vehicle requires regular replacement of air filter, spark plugs, drive belts and hoses, muffler and distributors. Considering only 1 percent of moving parts in EVs, it may be presumed that the potential value of the after-sales market is also about 1 percent.
In 2022, the 2W after-sales market generated a revenue of INR 400 billion. Since e-2Ws are only about 8 percent of the total 2W sales, with 1 percent moving parts compared to conventional 2Ws, the after-sales revenue from e-2W after-sales maintenance and servicing was around INR 320 million. E-2W maintenance and servicing necessitates investment in expensive high-voltage precision equipment and skills in short supply. Therefore, a competitive third-party-driven after-sales market is unlikely. Without third-party repair shops, the transition to e-2Ws cannot be sustained in a country like India.
It is now time to incentivise training institutes and the OEMs to train and set up third-party-owned repair shops for the maintenance and servicing of e-2Ws.
Thus far, governments have provided purchase incentives to buyers and PLI to manufacturers. It is now time to incentivise training institutes and the OEMs to train and set up third-party-owned repair shops for the maintenance and servicing of e-2Ws. This will improve the availability of skilled service personnel and reduce the initial upfront investment cost of e-2W repair shops, failing which India could face a situation similar to China, where the talent gap in the EV sector is one million, of which 80 percent of the shortage is in after-sales services.
Aritra Bhowmik leads the Energy Transition and Rural Enterprise Development for WWF-India.
Anamitra Anurag Danda is a Senior Visiting Fellow with the Energy and Climate Change Programme at the Observer Research Foundation.
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Aritra Bhowmik has a Masters degree in Energy Management. He leads the Energy Transition and Rural Enterprise Development for WWF-India in the Sundarbans.
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Anamitra Anurag Danda is Senior Visiting Fellow with ORF’s Energy and Climate Change Programme. His research interests include: sustainability and stewardship, collective action and institution ...
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