Cholamandalam expects electric vehicles to disrupt entry level two wheeler market
CHENNAI — Cholamandalam Investment and Finance Company, a prominent Murugappa Group non-banking financial company headquartered in Chennai, has projected that electric vehicles will emerge as a major disruptor in the country's two-wheeler market.
According to the company's latest annual report, the disruption is expected to be particularly pronounced in the entry-level and commuter segments of the two-wheeler market.
The Chennai-based lender, commonly known as Chola, explained that the ongoing shift towards electric vehicles (EVs) in the commuter segment is primarily being propelled by a combination of government incentives, lower operating costs, and the increasing availability of new products in the market. Despite these driving factors, the company pointed out that price sensitivity continues to be a critical factor influencing consumer decisions in this space.
In its annual report, the company stated that the automobile industry is currently witnessing an early but steady transition towards alternative powertrains. This transition is particularly evident in the adoption of electric vehicles, especially within the last-mile delivery segment.
Reflecting on recent market performance, Cholamandalam Investment and Finance Company noted that the domestic two-wheeler industry grew by 11 percent during the FY26 fiscal year. The company attributed this double-digit growth to several factors, including a notable recovery in rural demand, improved access to financing options, and better overall affordability for buyers.
Furthermore, the expansion of the customer base during FY26 was supported by rising demand from Tier-3 and Tier-4 markets. The company also highlighted that increasing participation by women riders played a significant role in broadening the consumer demographic.
However, looking forward to the FY27 fiscal year, the Chennai-based non-banking financial company expects a deceleration in market momentum. The lender projects that the domestic two-wheeler industry's growth will moderate to a range of 3 percent to 5 percent in FY27. This anticipated slowdown is attributed to the market transitioning away from a cyclical rebound phase and entering a steadier, more stable phase of demand.
