Iran war effect: Leading EV two-wheeler makers accelerate expansion amid petrol price worries

Mumbai: Leading electric two-wheeler makers TVS Motor, Bajaj Auto, Ather Energy, and Hero MotoCorp are aggressively expanding capacity as they look to tap booming demand for such eco-friendly vehicles, partly fuelled by worries of higher petrol prices due to the Iran war.

Combined monthly production of electric scooters at these companies is projected to exceed 150,000 units by the end of this fiscal year, nearly double the current output, company executives said in post-earnings investor calls recently.

The capacity ramp-up signals a notable shift in the industry from early adoption to mass-market scale. It comes even as companies navigate challenges such as commodity inflation, supply chain disruptions, and demand uncertainty linked to geopolitical tensions.


Share of electric two-wheelers reached a record 9.8% in March when volumes peaked to 191,000 units due to the fiscal year-end effect and advance purchases, reflecting steady demand momentum and growing consumer acceptance. The market share eased to 7.8% in April. However, sales surged 61% year-on-year to 148,000 units during the month, according to the Federation of Automobile Dealers Associations.

TVS, the market leader in EV volumes, has boosted capacity to about 40,000 units per month and aims to increase it to 50,000 in the near term. Its iQube electric scooter recorded sales of 370,000 units in FY26, up 33% year-on-year.

"We are constantly looking at capacity versus demand and expanding our network," said K N Radhakrishnan, CEO, at an investor call. "We intend to grow ahead of the industry."

Bajaj Auto reported strong momentum for its Chetak electric scooter, with retail sales surpassing 100,000 units in the March quarter. March alone saw sales of 50,000 units. The company currently has manufacturing capacity of 50,000 units per month and plans to fully utilise it, while also evaluating a larger scale-up. "We believe a substantive increase in capacity for Chetak is needed," said Rakesh Sharma, executive director.

Ather Energy is also expanding aggressively, anchored by a new manufacturing facility in Maharashtra. "This is our largest factory till date, initially planned for 1 million total capacity with 500,000 capacity going live in Phase 1 itself," said Tarun Mehta, CEO.

The plant is expected to significantly boost Ather's production capacity as it seeks to capture a larger share of the growing EV scooter market.

Hero MotoCorp is expanding capacity rapidly, increasing output from around 15,000 to 25,000 units per month, with plans to double to 50,000 by end-FY27, while targeting 100,000 units in the longer term for its Vida brand. "We are doubling our capacity in EV where in fact in a matter of a month, we would double our capacity from where we started last year, and then further down the road in few quarters, there'll be further doubling of capacity as we are seeing great momentum for our Vida brand," said Harshvardhan Chitale, CEO.

Industry executives remain optimistic about future growth. With improving profitability, policy support, and rising fuel costs, companies are betting that demand will remain strong.

If the expansion plans materialise, the four firms could together add over 2 million electric scooters annually by FY27, accelerating India's transition to electric mobility.

The expansion plans, however, carry real execution risk. TVS' Radhakrishnan flagged that production in April across the industry was impacted 10-15% due to labour shortages at Tier-2 suppliers, gas availability issues, and logistics disruptions. Hero's Chitale acknowledged that supply chain constraints have repeatedly prevented the company from realising its EV potential, describing a pattern where "everything is not working in every department and every month."