Two-wheel­ers power In­dia’s EV rev­o­lu­tion

The gov­ern­ment has set a tar­get of elec­tric ve­hi­cles mak­ing up 30% of new sales of cars and mo­tor­cy­cles by 2030 from less than 1% to­day.

Bangkok Post - - BUSINESS - By Ra­jen­dra Jad­hav and Aditi Shah

Hurt by high fuel prices, Vinod Gore, a farmer in Gove vil­lage in the western In­dian state of Ma­ha­rash­tra, ditched his petrol scooter for an elec­tric model, un­der­lin­ing how two-wheel­ers are driv­ing the coun­try’s goal of elec­tri­fi­ca­tion of its ve­hi­cles. Gore’s elec­tric scooter, built by In­dian startup Ok­i­nawa, runs for about 100-120 km on a sin­gle charge which costs the sug­ar­cane farmer less than 10% of the 150 ru­pees ($2.15) he would oth­er­wise have spent on fuel for the same dis­tance. “I bought it to save money,” said Gore, who paid 75,000 ru­pees ($1,077) for the scooter and ex­pects to re­cover the cost in two to three years in terms of sav­ings on petrol and main­te­nance. Prime Min­is­ter Naren­dra Modi’s gov­ern­ment has set a tar­get of elec­tric ve­hi­cles mak­ing up 30% of new sales of cars and two-wheel­ers by 2030 from less than 1% to­day. But its ef­forts to con­vince car­mak­ers to pro­duce elec­tric ve­hi­cles have flopped mainly be­cause of no clear pol­icy to in­cen­tivise lo­cal man­u­fac­tur­ing and sales, lack of pub­lic charg­ing in­fra­struc­ture and a high cost of bat­ter­ies. Cost-con­scious two-wheeler buy­ers like Gore might be a bet­ter bet. It would also open up a new mar­ket for global com­pa­nies like Ja­pan’s Yamaha Mo­tor and Suzuki Mo­tor that are draw­ing up ini­tial plans to launch elec­tric scoot­ers and mo­tor­cy­cles in the coun­try. The po­ten­tial is huge. In­dia is the world’s big­gest mar­ket for scoot­ers and mo­tor­cy­cles with an­nual do­mes­tic sales ex­ceed­ing 19 mil­lion in the fis­cal year ended March 31, 2018 — six times that of car sales over the same pe­riod. The next big­gest mar­ket is China, with an­nual mo­tor­cy­cle sales of about 17 mil­lion in 2017. Elec­tric scoot­ers make up a frac­tion of the to­tal but are grow­ing fast. In fis­cal 2017-18, sales more than dou­bled to 54,800 from a year ago while elec­tric car sales fell to 1,200 from 2,000 over the same pe­riod, ac­cord­ing to data from the So­ci­ety of Man­u­fac­tur­ers of Elec­tric Ve­hi­cles (SMEV). By 2030, sales of elec­tric scoot­ers are ex­pected to cross two mil­lion a year, even as most car­mak­ers re­sist bring­ing elec­tric cars to In­dia. The road­blocks for scoot­ers are fewer. Com­pared with cars, scoot­ers are lighter, which means they can use less pow­er­ful bat­ter­ies that are cheaper. The scoot­ers can also be charged quickly and more eas­ily, of­ten us­ing ex­ist­ing plug points in homes, and their price is sim­i­lar to petrol-pow­ered mod­els. The chal­lenge is that most elec­tric scoot­ers sold to­day are util­i­tar­ian and not as pow­er­ful as mod­els that run on petrol that can go faster and climb gra­di­ents eas­ily. The sup­ply chain is not ro­bust which means man­u­fac­tur­ers need to rely on im­port­ing com­po­nents. Im­por­tantly, elec­tric­ity sup­ply in smaller towns and cities, where de­mand is pick­ing up, is ir­reg­u­lar although fre­quent power short­ages in In­dia are a thing of the past. “In­dia’s elec­tric rev­o­lu­tion will be led by two-wheel­ers. It is a value for money equa­tion,” said So­hin­der Gill, global chief ex­ec­u­tive of­fi­cer at Hero Elec­tric, the coun­try’s top-sell­ing e-scooter man­u­fac­turer.

EV POL­ICY

In May 2017, In­dia’s fed­eral eco­nomic pol­icy think tank be­gan dis­cus­sions to form a new pol­icy that suggested elec­tri­fi­ca­tion of all new ve­hi­cles by 2030 by mainly of­fer­ing sub­si­dies to buy­ers. The pro­posal faced re­sis­tance from car­mak­ers and auto parts com­pa­nies that con­sid­ered the shift too sud­den and am­bi­tious, and the tar­get was di­alled back to 30%. In­dia is now work­ing on a new pol­icy which aims to in­cen­tivise in­vest­ments in elec­tric ve­hi­cle man­u­fac­tur­ing, bat­ter­ies and smart charg­ing, in­stead of only giv­ing ben­e­fits on sales. The gov­ern­ment also wants to push the use of elec­tric ve­hi­cles for pub­lic use, a rev­o­lu­tion al­ready led by three-wheeled au­torick­shaws. Sales of these ve­hi­cles, ubiq­ui­tous on In­dian city roads, are ex­pected to dou­ble to 935,000 units a year by 2023, ac­cord­ing to con­sult­ing firm P&S Mar­ket Re­search. “A pol­icy or in­cen­tive to help man­u­fac­tur­ers of cars or two-wheel­ers will go a longer way in mak­ing elec­tric mo­bil­ity more af­ford­able than sub­si­dis­ing in­di­vid­ual buy­ers,” said Kaushik Mad­ha­van, vice pres­i­dent, mo­bil­ity at con­sul­tant Frost & Sul­li­van. A hand­ful of car­mak­ers in­clud­ing Maruti Suzuki In­dia Ltd, Toy­ota Mo­tor Corp and Nis­san Mo­tor Co are test­ing the ground to launch elec­tric ve­hi­cles in the coun­try, some as early as 2020. Two-wheeler com­pa­nies are fur­ther down the road with Hero Elec­tric and sev­eral start-ups in­clud­ing Ok­i­nawa, Ather En­ergy and Twenty Two Mo­tors al­ready sell­ing elec­tric scoot­ers. Hero, which sold 31,000 elec­tric scoot­ers in 2017-18, “ex­pects to dou­ble sales ev­ery year for the next few years and break even on costs within one year,’’ said Gill. Ja­pan’s Suzuki Mo­tor is work­ing on plans to launch an elec­tric scooter in In­dia by 2020, while In­dian mo­tor­cy­cle mak­ers Ba­jaj Mo­tor and TVS Mo­tor are also eye­ing elec­tric mod­els. “Yamaha, which is de­vel­op­ing a global elec­tric two-wheeler plat­form, plans to bring an elec­tric scooter or mo­tor­cy­cle to In­dia in the next three to five years,’’ Ya­suo Ishi­hara, man­ag­ing direc­tor of the man­u­fac­turer’s In­dia unit, told Reuters. While Ishi­hara did not say how much Yamaha plans to in­vest in its elec­tri­fi­ca­tion push, he said any in­vest­ment should mainly be for power units and bat­ter­ies and to de­velop in­fra­struc­ture with part­ners. “Right now the need of the hour is a proper roadmap and a clear pol­icy by the gov­ern­ment of In­dia to ac­tu­ally turn this am­bi­tion into re­al­ity,” Ishi­hara said.

RU­RAL GOES ELEC­TRIC

Gore is pleased with his Ok­i­nawa scooter, which he pur­chased four months ago, be­cause it is easy and cheap to main­tain and he can charge it at home. The scooter is fit­ted with a bat­tery that can gen­er­ate max­i­mum power of 2,500 watts, giv­ing a top speed of 75 km per hour, which he says is suf­fi­cient for his needs. His only gripe is that the scooter strug­gles when go­ing up­hill. “You can’t in­crease speed on moun­tains the way you can ac­cel­er­ate with tra­di­tional petrolpow­ered scoot­ers or mo­tor­cy­cles. There is turbo mode that de­liv­ers more power but that is still less than petrol scoot­ers,” he said. Frost’s Mad­ha­van says most elec­tric scoot­ers cur­rently on sale are ba­sic in terms of de­sign, range and per­for­mance so that the price can be kept af­ford­able, es­pe­cially in smaller towns where dis­tances are shorter and buy­ers more fru­gal. But he says there is also a mar­ket for more premium mod­els like those made by Ben­galu­rubased start-up Ather En­ergy which are de­signed to ap­peal to tech-savvy city com­muters. Ather’s scoot­ers are con­nected to the in­ter­net, come with a touch­screen and have a top speed of 80 kph. They cost about 131,000 ru­pees — nearly twice the amount Gore paid. Ok­i­nawa and Ather are both ex­pand­ing their pro­duc­tion fa­cil­i­ties. While Ok­i­nawa is al­ready build­ing a new plant in north­ern In­dia to more than tre­ble its ca­pac­ity to a mil­lion elec­tric scoot­ers a year, Ather is scout­ing for a site to set up its sec­ond plant. “There is a line of sight now,” said Ravneet Phokela, chief busi­ness of­fi­cer at Ather which is backed by ven­ture cap­i­tal firm Tiger Global, adding that “”there is greater ac­cep­tance by buy­ers and the gov­ern­ment is also com­ing on board.’’ Ather, whose busi­ness model in­cludes set­ting up charg­ing sta­tions in ev­ery city it launches, is work­ing on new prod­ucts ahead of plans to ex­pand to 30 cities in the next three years. “There has never been a bet­ter time to be in this busi­ness than now,” he said.

PHO­TOS BY REUTERS

ABOVE A worker checks the power sup­ply to recharge an elec­tric scooter in­side a workshop in Ahmed­abad.

In­dia is the world’s big­gest mar­ket for scoot­ers and mo­tor­cy­cles with an­nual do­mes­tic sales ex­ceed­ing 19 mil­lion in the fis­cal year ended March 31, 2018 — six times that of car sales over the same pe­riod.

LEFT A boy pre­pares to recharge his elec­tric scooter out­side his home.

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