Companies

Murugappa firm TII all charged up for electric three-wheeler foray

G Balachandar Chennai | Updated on February 25, 2021

Vellayan Subbiah, Managing Director, TII   -  BIJOY GHOSH

Working on prototypes with a Korean company

Murugappa Group company Tube Investments of India Ltd (TII) has indicated that its proposed foray into electric three-wheelers is based on a well-planned strategy and the company is confident of making its mark in the segment.

Recently, the company announced its ₹200-crore plan to manufacture and sell electric three-wheelers in the country.

Second attempt

This is the second entry by TII into the electric vehicle segment. In 2008, the company took a plunge into electric two-wheeler segment with the launch of electric scooters under the brand name BSA. While initial months were good, sales stagnated in the following years due to slow market acceptance and withdrawal of government subsidy then. The company discontinued this business later.

Now, the company is gearing up enter electric three-wheeler segment, which has been seeing faster adoption due to their low operational costs in last-mile delivery options.

“We are going to start manufacturing and selling electric three wheelers and it will be around perhaps December to January timeframe,” Vellayan Subbiah, Managing Director, TII, told during the Q3 earnings call of the company.

TII has been working on prototypes with design inputs from a Korean company.

Business strategy

Explaining further about the electric three-wheeler plan, KK Paul, President, TI Cycles, an arm of TII, stated that the company had considered all factors into account – the government policy, the EV ecosystem, post-Covid optimism etc. “We looked at design, value proposition, buyers, total cost of ownership and our positioning in the current wave and EV adoption levels,” he said.

“We have done a lot of reliability tests, design tests and we had consultation with our design partners. We are very hopeful that we deliver something good for the market and for our customers and thereby win over a period of time,” added Paul.

“The requirements and expectations in the electric 3W segment, both from a customer and technology perspective, are not very high. Hence, ideally, new players can become as effective as existing players as long as the fleet owners find value in owning electric 3Ws as part of their fleet. If the 3W segment grows as the government envisions it to be, then there would be enough space for numerous players,” said Suraj Ghosh, Principal Analyst — South Asia Powertrain Forecasts, IHS Markit.

A recent NITI Aayog report said that in the final-mile delivery use case, electric three-wheelers are already cheaper than their CNG counterparts on a total cost of ownership basis (at about ₹2.5/km) in some geographies such as Delhi, due to government incentives. In the ride-hailing use case, electric auto-rickshaws are close to cost parity based on TCO, especially in Tier-2 and Tier-3 cities, where shorter trip distances require smaller batteries (i.e., less than 3 kWh).

Published on February 25, 2021

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