Mumbai, July 7th, 2025: India’s electric two-wheeler market continued its upward trajectory in June 2025, registering a year-on-year growth of 32%, despite looming disruptions from China’s ban on rare-earth magnet exports, which may impact future growth.
According to a sector update from Equirus Securities, over 105,000 electric two-wheelers were sold in June, increasing segment penetration to 7.3%, up from 5.8% a year ago. The overall two-wheeler retail market also experienced a 5% year-on-year growth, with North India seeing the highest regional increase at 10%.
However, industry insiders warn that supply-side stresses may hinder momentum. “The rare-earth export ban from China is a significant concern,” stated a Mumbai-based auto analyst. “It may limit motor and battery component availability for key electric two-wheeler manufacturers, impacting volumes as early as the third quarter of FY26.”
TVS, Hero, and Bajaj Lead the Market
Legacy original equipment manufacturers (OEMs) continue to strengthen their dominance in the electric two-wheeler market. TVS Motors has been India’s top seller of electric two-wheelers for three consecutive months, gaining additional market share through aggressive price cuts and battery upgrades to its iQube lineup. The company held a 24% market share in June. Hero MotoCorp improved its market share to 7.3%, a notable rise from 3.9% a year ago, driven by the expanded Vida V2 range and a focus on scooters priced below ₹1 lakh. Bajaj Auto maintained its position, while Ola Electric saw a significant decline, with its market share falling to 19.2% in June from 46.1% last year, even as it began deliveries of the highly anticipated Roadster X. Bajaj’s foray into CNG bikes has been less successful, with approximately 3,100 CNG bikes sold in June. The slow uptake is attributed to limited fueling infrastructure and consumer hesitancy; however, gig economy workers are emerging as a niche customer base.
Three-Wheeler Market: Electric Growth, CNG Decline
In the three-wheeler category, electric variants now account for 60% of sales, up from 55% last June. In contrast, CNG’s share has decreased to 25%, despite a slight month-on-month recovery. Bajaj Auto continues to lead the CNG three-wheeler market with an 87% share. The electric auto-rickshaw segment recorded 17,000 units sold in June, representing a 55% year-on-year growth. Mahindra & Mahindra remained the leader in this category, capturing 43% of the electric auto market, followed by Bajaj at 38%. Piaggio’s share fell to 6%, continuing a downward trend observed over the past year.
Passenger Vehicle Trends
In the passenger vehicle segment, retail sales in June saw a modest 2% year-on-year increase. Eastern India led with a 6% growth rate, while the southern and northern regions experienced minor declines. CNG car penetration continued to rise, reaching 21%, fueled by strong demand in states like Bihar.
For the fifth consecutive month, the share of petrol vehicles fell below 50%, now standing at 48%. Electric car penetration improved slightly to 4.4%, compared to 2.5% a year ago, indicating a gradual but steady adoption of personal mobility.
Outlook: Growth Under Pressure
Despite positive headline numbers, challenges loom on the near-term horizon. Dealer feedback indicates a slowdown in enquiries across all segments, with only 21% of two-wheeler dealers and 38% of passenger vehicle dealers reporting healthy bookings. Additionally, disruptions from the monsoon season, financing constraints, and supply-chain pressures, particularly around rare earth, may negatively impact volumes in Q2. Nevertheless, Equirus Securities remains cautiously optimistic. “Legacy OEMs are adapting rapidly, rural demand remains strong, and government capital expenditure should support the commercial vehicle and construction equipment segments,” the report stated. “While the rare-earth situation requires close monitoring, the structural shift toward electrification remains intact.”
