Economy

High costs drive electric two-wheelers off the roads

Rashmi Pratap Mumbai | Updated on January 10, 2018

BL19_BP_ELECTRIC_BIKES

Over the past 10 years, just 4.4 lakh electric two-wheelers have been sold in India, a far cry from petrol two-wheeler sales numbers — over 18 lakh a month. The performance of electric two-wheelers (e2Ws) in the last decade shows that the Centre will have to double its efforts in supporting the fledgling sector to ensure a substantial shift away from petrol.

“There is lack of awareness about electric 2Ws and price points are high compared to petrol two-wheelers, making them unattractive for buyers,” said Sohinder Gill, CEO of Hero Electric, market leader in the space. This fiscal, the e2W market is likely to clock sales of 35,000 units.

Until 2015, India only had e2Ws which ran on lead batteries. These gave a maximum speed of 25 kmph and did not require registration or insurance. The low price points, mostly around ₹25,000, were a big draw.

Fixing batteries

But problems started when batteries had to be replaced every 18 months, against the two years and above promised by dealers at the time of sale. A ₹9,000 new battery left owners with an annual saving of only ₹5,000 vis-à-vis a petrol vehicle.

“Moreover, lead batteries could be charged only in a garage or a charging station, making it impossible for flat owners to use them,” said Gill.

Since FY15, lithium battery-based e2Ws are being sold, where batteries are portable and can be charged in any mobile phone socket. If the vehicle is used for 1,500 days over the five-year battery life and each day a litre of petrol is used, then it will result in saving petrol worth ₹1 lakh.

Despite this savings, the sales numbers for e2Ws are not looking up. Today, these vehicles cost around ₹84,000, against petrol vehicles such as Honda Activa, which are available for ₹52,000 upwards.

Also, the lithium-backed two-wheelers run for around 80 km per charge and offer a maximum speed of 45-55 kmph, too less for the emerging patrons of Royal Enfield, which sold around 68,000 units last month.

“With the lifestyle segment emerging in India, the aspirations of the youth are for bigger cc and more performance-oriented bikes. Current e2Ws are nowhere near the conventional 2Ws of this segment,” said Suraj Ghosh, Principal Analyst - South Asia, Powertrain Forecasts, at IHS Automotive.

But this has not deterred Japan’s Okinawa from entering the e2W space here. It has sold 2,000 vehicles in just eight months of its launch. Jeetender Sharma, founder and MD of Okinawa Scooters India, said lack of awareness among consumers and absence of financing of e-vehicles are major deterrents to the market’s growth.

Banks shy away from financing e2Ws as it is a new category, agreed Gill, adding: “And private investors say the volumes are too small to warrant investments.”

For now, Okinawa is aggressively working on creating awareness about e-vehicles not only in the B2C segment, but also B2B. “We are launching a product that will run 200 km per charge and that will fill many gaps,” said Sharma. Okinawa is running campaigns in major educational institutes to woo the youth.

But it is only government support that can give a boost to the fledgling sector, said Sharma. “If the government front-loads the incentives and makes the first one million scooters similar in costs as petrol 2Ws, then consumers will consider e2Ws,” he said. .

Published on September 18, 2017

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor