TVS Motor Company plans to boost its electric two-wheeler production to 80,000 units monthly by March 2027. This follows a strong second quarter where EV sales grew 129% year-on-year. Investors are watching how this expansion helps the firm manage competition from rivals like Bajaj Auto and Ather Energy while demand for traditional gasoline vehicles begins to soften.
TVS Motor Company is scaling up its production capabilities to capture a larger share of the Indian electric two-wheeler market. The company has announced plans to increase its monthly electric vehicle manufacturing capacity to 80,000 units by March 2027, up from its current level of 60,000 to 65,000 units. This strategic shift is intended to support the company’s ongoing growth in the battery-powered segment.
This expansion follows a period of rapid growth for the company's electric business. In the second quarter, TVS Motor reported sales of 1,86,186 electric units, a significant jump compared to the 80,009 units sold in the same period last year. This 129% growth rate highlights the company's ability to outperform the broader two-wheeler industry, which recorded an 84% growth in volume over the same timeframe.
The electric transition in India is moving faster in the scooter category than in the overall two-wheeler market. While electric vehicles currently account for about 11% to 12% of the total two-wheeler market, adoption in the scooter segment has crossed the 20% mark. TVS Motor is aggressively expanding capacity to maintain its competitive position before the market reaches a state of mass saturation.
Competition in this space is intensifying, which is a key factor for investors to track. Bajaj Auto is working toward a monthly capacity of 80,000 units for its Chetak line, and Ather Energy is also investing in new manufacturing facilities to push its capacity beyond 41,000 units. As manufacturers ramp up production, the industry may see increased pressure on pricing and profit margins as companies fight for market share.
While the electric portfolio is on an upward trajectory, the outlook for the company's traditional internal combustion engine business is more cautious. Management has indicated that growth for gasoline-powered motorcycles is likely to moderate in the second half of the financial year. This expectation stems from a high base effect—where the company is comparing its performance against a very strong previous year—and a shift in consumer preference toward battery-powered models.
Looking ahead, the key monitorables for investors will be whether the company can maintain its profit margins while scaling production, how effective its new capacity is at meeting actual demand, and how competitors react to this supply increase. Sustaining this momentum will depend on the company's ability to balance the slowdown in traditional bike sales with the capital requirements of its electric vehicle expansion.