Electric to gain momentum as auto fuels get dearer

The shift to electric two-wheelers will continue to gain traction though concerns remain on high input costs arising from the war in Ukraine

- Amit Vijay M

Win fuel and gas prices is only Tith global crude oil prices skyrocketing, a steep hike inevitable. Add to this the supply chain disruptions following the Ukrainian crisis and the challenges for India's two-wheeler market are just going to increase.

Manufacturers of motorcycles and scooters will now have to brace themselves for higher input costs while steep petrol prices will push potential buyers to ditch the pump for the plug. Electric has been gaining momentum in recent months and this trend will only gain traction going forward.

For traditional two-wheeler makers who have been reeling under a protracted slowdown, it is going to be a double whammy. On the one hand, they will have to deal with the acceleration in the shift towards electric while absorbing the impending increase in input costs to the extent possible.

Amid poor demand, it is going to be extremely tough for them to pass this burden entirely on to buyers. As it is, the commuter segment has seen steep price hikes in recent times thanks largely to tougher regulations on emissions and safety. Sales have collapsed as a result and the aftermath of the pandemic has only made things worse.

Diego Graffi, Chairman & MD of Piaggio Vehicles, has his own take on the issue. "Companies will have to bear higher costs but it is unlikely if they can pass these on fully to customers," he says. One is already seeing disruption both on costs of acquisition of these components and their availability, he adds.

Over the last two years, Piaggio and its manufacturing counterparts in the industry have been grappling with the challenges of costs for an ICE (internal combustion engine) vehicle. It started with the Bharat VI emission norms which entailed expensive add-ons. The price tag of vehicles obviously increased and this was accompanied by the constant rise in fuel prices.