Royal Enfield, India’s motorcycle company, to enter E-Car industry

Royal Enfield, the motorcycle company, has reached the “advanced” stages of developing its first electric bike to launch next year, as global manufacturers increase their investments in a bid to break into the booming high-performance electric bike market.

Royal Enfield was founded in the English Midlands in 1901 before moving to India, and promotes itself as the world’s longest-running motorcycle brand. In recent years, it has expanded globally, from the United States to Thailand, capitalizing on a large fan base of fans of its classic bikes.

According to the Financial Times, Royal Enfield’s chief executive, P Govindarajan, said that the falling costs of electric vehicles will allow the company to launch its first model in the next financial year, which begins in April 2025.

According to CNN, he said, “Our focus will be on a great-looking, very distinctive electric car,” adding that while “no one is making money in the electric world yet… the cost of electric cars is changing rapidly.”

“Within a year, when we introduce the product, we will be competitive,” Govindarajan said.

Electric vehicle sales growth has slowed worldwide as manufacturers struggle with range and high costs, while developing high-quality electric motorcycles has proven particularly difficult.

Compared with four-wheelers, motorcycles have limited battery space, requiring frequent charging or swapping, while profit margins are lower than for internal combustion engine-powered bikes.

Govindarajan said Royal Enfield would likely opt for a “fixed battery with fast charging” rather than battery swapping, and Anuj Dua, Royal Enfield’s Asia-Pacific business head, said its electric bike was in “advanced development” stage. In Japan, Yamaha Motor Co. has set an ambitious goal of 90% of its motorcycle sales being electric by 2050, but the group has had to postpone its previous target of selling 10 electric models by the end of this year to mid-2025. Honda plans to invest 500 billion yen ($3 billion) over the next decade as it aims to sell 4 million electric bikes annually by 2030.

US motorcycle maker Harley-Davidson this month secured $89 million in federal funding to expand production of its electric motorcycles in Pennsylvania.

In 2022, Royal Enfield invested in Spanish electric motorcycle maker Stark Future, and the company then showed an electric prototype of its 450cc Himalayan at last year’s Milan motorcycle show.

Analysts said producing commercially viable, high-performance electric motorcycles remains a challenge. “It takes a lot of effort to produce an electric car with this kind of performance, power and torque, and the technology needs to be further refined,” said Varun Baxi, an auto industry analyst at brokerage Nirmal Bang in Mumbai.

Royal Enfield has grown rapidly in India, the world’s largest motorcycle market by sales, dominating the “mid-size” segment popular among wealthy Indians.

The bikes are larger than the cheap scooters that dominate the country but smaller than the luxury bikes made by brands such as Harley-Davidson or Triumph, and are typically priced between 150,000 rupees ($1,800) and 400,000 rupees each.

However, the company has lost market share as more domestic and global brands launch mid-size models in India, forcing it to turn to exports for growth.

So far, scooters have led the shift to electric vehicles in India, with companies such as SoftBank-backed Ola Electric and Bajaj developing models priced at around 100,000 rupees.

Ola made its first successful initial public offering on the stock market on Friday, in India’s biggest IPO so far this year.

The Indian government has rolled out support schemes to accelerate the shift to electric vehicles and lure global manufacturers such as Tesla to set up factories in the country, with mixed results so far. Royal Enfield’s parent company Eicher has applied for subsidies under India’s Production Linked Incentive Scheme for electric vehicles.

Govindarajan said the adoption of electric motorcycles “will take some time” but is moving faster than he initially expected. “India is very committed as a country to embrace the technology,” he added.