Electric Scooter Industry Market Insight: H1 2026 Raw Material Review & H2 2026 Outlook

To: Our Valued Partners

Thank you for your continued trust and support. In the first half of 2026, the global electric scooter industry experienced significant raw material cost volatility. We have compiled this market insight to help you better navigate the market landscape and inform your purchasing and pricing strategies for the second half of the year.

I. H1 2026 Raw Material Review: A "Cost Storm"

The first half of 2026 saw an unprecedented surge in raw material prices across the board for the electric scooter industry.

Base metals such as aluminum and copper saw price increases exceeding 40%, while plastic resins surged over 80%-3. In response, major Chinese electric two-wheeler brands including Yadea, NIU, Aima, and Tailg implemented across-the-board price hikes effective April 1, 2026, with increases ranging from RMB 200–300 per unit.

From a sub-material perspective, the most direct impacts on our industry include:

Global ripple effects are compounding the pressure. According to the International Energy Agency's Global Critical Minerals Outlook 2026, demand for key energy transition minerals-including lithium, copper, cobalt, and graphite-continued to grow rapidly through 2025–2026, driven by electric vehicles, battery storage, and renewable energy deployment. Lithium demand grew at an average annual rate of approximately 25% over the past two years.

Battery material prices have surged significantly: lithium prices jumped from approximately $8/kg to nearly $24/kg, and lithium-ion battery cells became 30–50% more expensive depending on sourcing timelines. On a broader scale, between January 2025 and April 2026, base metals including aluminum, copper, and tin rose by roughly one-third, with copper reaching record highs.

Industry data reflects the real impact on manufacturers. Indian two-wheeler manufacturers flagged rising costs of lithium-ion cells, rare earth magnets, memory chips, and key metals, with Bajaj Auto estimating commodity inflation could impact costs by 3.5–4.0% in the quarter. Hero MotoCorp reported bill-of-material inflation running in the high single digits, with price hikes of approximately 2% already implemented.

II. H2 2026 Outlook: Pressure to Persist, But Markets Are Adapting

📈 Near-Term Cost Pressure Expected to Remain

Multiple manufacturers have indicated on earnings calls that raw material cost pressures are unlikely to ease in the near term. Ather Energy warned that "the hit on not just the supply of material, but also the cost of raw materials [will] remain inflated for a while," and noted that further price increases could follow. Bajaj Auto similarly stated that further pricing action could be considered if inflation persists.

Key Watch Indicators for H2 2026:

Geopolitical Risks: The West Asia crisis has disrupted outbound logistics and commodity supply chains, with manufacturers like Bajaj Auto reporting logistics disruptions affecting their ability to service demand by 10–15%. Aluminum, steel, copper, and noble metals have all seen inflation due to event-led supply shocks.

AI Infrastructure Squeeze: A structural shift is underway-manufacturing capacity for memory chips (DRAM, RAM) is being redirected toward high-margin AI applications. Prices of memory chips have risen 2–4 times in some cases, and supply availability for automotive-grade memory chips has dropped below 50% in certain categories. This is a less visible but increasingly significant cost driver for electric scooter electronic systems.

Battery Cost Trajectory: Whether lithium prices stabilize near $24/kg or continue their upward trend will directly impact battery costs-the single largest cost component of any electric scooter.

📊 Strong Demand Growth Provides a Buffer

Despite cost pressures, robust end-market demand is creating room for price absorption:

• Global Electric Scooter Market: Valued at approximately USD 21.45 billion in 2025, projected to reach USD 73.46 billion by 2035, growing at a CAGR of 13.1%
• Compact Electric Scooter Segment: Approximately USD 853 million in 2025, projected to reach USD 1.93 billion by 2032 at 12.4% CAGR
• Electric Scooters & Motorcycles Combined: Projected to reach USD 37.13 billion in 2026, expected to grow at 9.2% CAGR to USD 63.64 billion by 2032
• Asia-Pacific remains the dominant market, accounting for 75.7% of global revenue share, with China responsible for approximately 65–70% of global electric scooter production. India is emerging as the fastest-growing national market, supported by the PM E-DRIVE subsidy program and localized manufacturing.

Consumer preference is shifting from "recreational use" toward "commuting use," driving demand for longer range, enhanced safety features, and smart connectivity. This premiumization trend supports higher price points and improves manufacturers' ability to pass through cost increases.

⚠️ Key Risks to Monitor in H2

• Regulatory Divergence: Different markets maintain varying regulations on speed limits, helmet requirements, insurance, and road access. Paris voted to end shared rental e-scooters in 2023, highlighting how public acceptance and parking management can impact market dynamics. The UK continues to restrict privately owned e-scooters on public roads, making regulatory clarity a key growth factor.
• Currency Volatility: Euro and USD exchange rate fluctuations have become a significant variable for export-oriented manufacturers, potentially impacting landed costs and margins.
• Battery Safety Compliance: As e-scooter penetration grows, regulators are tightening safety rules for lithium battery packs. China's SAMR issued a lithium battery safety specification for e-two-wheelers in 2024, and similar requirements are emerging globally. Compliance costs may rise.

III. Strategic Recommendations

Given this cost environment, we recommend the following proactive measures:

• Secure Long-Term Orders: Locking in orders at current price levels for H2 2026 can help mitigate the risk of further raw material inflation.
• Focus on Premium Products: High-performance, feature-rich models are less price-sensitive and offer stronger margin buffers. Consider shifting your mix toward products with advanced features, smart connectivity, and superior battery systems.
• Monitor Our Regular Price Updates: We will continue tracking aluminum, lithium, copper, and other core material prices and keep you informed of any adjustments.
• Explore Battery Swapping Compatibility: The battery-as-a-service model is gaining traction, particularly in India and Southeast Asia, as it reduces upfront costs and addresses range anxiety. Products compatible with swappable battery ecosystems may open new sales channels.

Appendix: Key Data Snapshot

Should you have any questions about the above analysis, or if you would like a detailed cost breakdown and quotation for your specific orders, please do not hesitate to contact me directly.

Best regards,

[Mona]
Kukirin Factory Director

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