TVS Motor Company is expanding its electric two-wheeler manufacturing capacity by up to 25% as demand for EVs continues to outpace supply amid the war in Iran.

India's top electric two-wheeler maker has a monthly manufacturing capacity of 40,000-45,000 units currently. It plans to raise that to 50,000-plus units in three to four months. It sold around 49,000 units last month.

"Further expansion is targeted for the fourth quarter [of the fiscal year]," says Gaurav Gupta, president of TVS Motor's India two-wheeler business.

The ramp-up comes as EV penetration in the two-wheeler industry rose to 10.7% in August compared to 6.6% in February, a month before the Iran war broke out. The company expects no slowdown in EV demand anytime soon.

The war in Iran is having a two-pronged impact on the automotive industry. Disruptions to shipping routes have pushed up commodity costs, while uncertainty over fuel availability is prompting more consumers to consider EVs, a shift evident in both two-wheelers and passenger cars.

Supply chain security is another priority, the executive says, with the company exploring parallel technologies to reduce dependence on semiconductors and rare-earth magnets.

TVS says it welcomes Delhi's EV policy that mandates electric two-wheelers from April 2028. "We support this direction towards sustainability, and we will be working to adhere to the direction of the government and to ensure that our systems are geared up for this," says Gupta.

TVS had a 22% share of Delhi's electric two-wheeler market this month, making it the top player in the capital as well.

The company that became the world's third-largest two-wheeler maker last calendar year unveiled a set of refreshes across its premium motorcycle portfolio, the Apache and Ronin, on September 17th.

Heading into the festive season, Gupta calls the macroeconomic backdrop a "mixed bag", pointing to below-normal rainfall that's offset by high reservoir levels, alongside the high base of last year because of GST cut-led demand.

The company says it remains cautiously optimistic about festive demand with expectations of high single-digit growth during the festive period.

"This festive season, we are further strengthening our premium motorcycle portfolio with thoughtful and meaningful enhancements," says Vimal Sumbly, head of premium business at TVS, referring to the refreshes.

In motorcycles, 27% of the industry volumes are in the premium and super premium segment (150 cc+), he says.

"And if you look at the CAGR over the last two to two-and-a-half years, the industry growth rate has been driven predominantly by TVS. We had a 29% growth rate versus the industry's 20%, and that's what has resulted into the market share increase also."