Despite rising sales, high battery costs, import dependence and low scale continue to weigh on profitability for India’s electric two-wheeler makers.
India’s electric two-wheeler (e2W) market continues to widen rapidly, but profitability remains a major challenge for manufacturers despite high demand and rising adoption.
Over 14 lakh electric two-wheelers were sold in FY26, making the segment the largest contributor to India’s EV market. However, industry experts say sustained profits remain difficult due to high component costs, import dependence and continued investments in technology and distribution.
According to Economic Times, Battery cells, which account for nearly half of vehicle costs, remain largely imported, putting pressure on margins. Power electronics, controllers and several motor components also continue to have limited localisation, increasing exposure to currency fluctuations and logistics costs.
Lower production volumes compared with conventional ICE vehicles further add to the challenge, as R&D, software development and manufacturing costs are spread across fewer units.
At the same time, EV-focused manufacturers are investing heavily in sales and service networks, adding to cost pressures.
However, signs of improvement are increasing. Companies such as Bajaj Auto have indicated better unit economics in their electric scooter business. Industry leaders believe long-term profitability will depend on intense localisation, higher production volumes and stronger control over core technologies.
