According to a research report, domestic demand for electric two-wheelers in China was under pressure during January and February, primarily due to the transition to new national standards for electric bicycles and the phase-out of trade-in subsidies. Sales of electric motorcycles, however, remained relatively stable. Looking ahead, industry sales are expected to recover in the second quarter of 2026, driven by restocking demand, peak season sales, and new product launches.
Internationally, rising oil prices have led to a significant increase in electric motorcycle sales in Hanoi and Ho Chi Minh City. The price of electric motorcycles has become nearly comparable to that of petrol motorcycles with similar engine capacities. Higher oil prices are likely to further enhance the economic advantage of using electric motorcycles. With improvements in products, infrastructure, and distribution channels, electric motorcycle adoption in developing regions such as Southeast Asia is expected to reach a turning point.
Key observations include:
Domestic electric two-wheeler sales faced challenges in the first two months of the year but are projected to rebound in the second quarter of 2026. Data shows that sales in January were 3.457 million units, down 3.6% year-on-year, while February sales fell to 2.988 million units, a decline of 37.9%. The decrease was mainly attributed to regulatory changes and subsidy reductions affecting electric bicycles, though electric motorcycle sales demonstrated relative resilience. Certain brands gained market share by adjusting their product mix early, with a higher proportion of electric motorcycle sales contributing to better-than-industry growth.
Rising oil prices are amplifying the cost-effectiveness of electric motorcycles, which may accelerate adoption in Southeast Asia and other regions. Current electric motorcycle penetration in major Southeast Asian markets is approximately 6%, with Vietnam leading at 22%, while other countries remain at around 1%. Following recent oil price increases, sales in key Vietnamese cities have surged, supported by price reductions from some manufacturers. Many Southeast Asian governments have introduced policies to support the transition to electric motorcycles, including clear electrification targets and infrastructure development. As electric motorcycle prices approach parity with conventional models and oil prices rise, the economic case for electric models strengthens. With continued efforts in product development, infrastructure, and channel expansion, electric motorcycle penetration in developing markets is poised for growth.
Production capacity has already been established in Southeast Asia by leading manufacturers, with one company's overseas electric motorcycle sales outpacing those of domestic peers, positioning it to benefit early from market trends.
Earnings forecasts for several companies have been largely maintained through 2026, with new projections introduced for 2027. Current valuations indicate potential upside, with target prices suggesting significant room for growth based on forward earnings estimates.
Key risks include slower-than-expected consumer adoption of new electric bicycle models and weaker-than-anticipated impact of overseas electric motorcycle policies.