Naveen Munjal admits he was off the starting blocks far too early. He launched Hero Electric back in 2007 when electric vehicles were still a distant spark. It’s been a long, hard haul but he says: “I’d rather be early than late. Yes, we were way too early but it’s given us credibility in the marketplace and we already have a dealer network in place. Newer companies are playing catch-up.”

Munjal’s now looking to rev up the action. Hero Electric has four new vehicles on the market, all powered by high-performance lithium-ion batteries which can cruise roads at relatively high speeds. The company expects sales to rise from 31,000 last year to around 50,000 this year. That will represent more than half the expected market of 80,000 for electric two-wheelers, which itself is up from 55,000 last year.

The electric revolution is undoubtedly under way but expect many stops-starts and jams on the road ahead. The government’s keen to switch from polluting internal combustion engines (transportation, after all, accounts for over 10 per cent of India’s carbon emissions) but it realises it can’t afford any overnight upheaval that would dramatically alter the auto-industry landscape from two-wheelers to passenger vehicles and trucks.

Then there’s the oil industry: automobiles gulp 30 per cent of the petroleum from its refineries. And since electric vehicles have about 20 parts compared to 2,000 in an internal combustion vehicle, the components sector could be devastated by a rapid switch-over to electric road power.

Given the competing interests, it isn’t at all surprising the government’s been weaving in-and-out and back-and-forth about its EV policy. Nitin Gadkari was hoping to break the gridlock when he declared an electric revolution was on the way and that most IC cars should be off the road by 2030. That backfired badly and now the government, more modestly, reckons EVs will make up 33 per cent of vehicles on the road by 2030.

Leading the way will clearly be two- and three-wheelers. Hero’s sales have already risen this year. Also, look at Gurgaon-based Okinawa Autotech which found its sales zoomed to 12,000 during the October-November festival season, outdistancing its internal estimates. Munjal says mid-sized delivery firms have figured electric two-wheelers are cost-effective and are buying 10-20 scooters for their riders. The bigger firms, he says, usually hire riders with their own bikes.

Ride-sharing booster

Also helping to boost electric two-wheeler sales are new ride-sharing or motorbike-taxi companies that have sprung up, mostly in south India, in the last few years. Take Rapido, a three-year-old company. It says it does 30,000 daily rides in 16 cities. The firm’s just raised $6 million and carries passengers and does short-haul deliveries.

Ride-sharing’s been big ever since Indonesia’s Go-Jek highlighted this new sector’s potential. A string of Indian companies like Vogo, Fae Bikes and Bikxie are also raising funds and moving fast to grab market share. Fae Bikes offers last-mile connectivity and bought 70 Ridge+ e-scooters from Okinawa in October. Similarly, another ride-sharing company, Zoomcar, is using Hero Electric vehicles mostly in south India. Munjal says the vehicles had to be customised to be made “stronger” to take the strain of multiple users. “You don’t want the consumer to open up the battery or the brakes. It was a great learning experience and helps us target a market that didn’t exist before,” he says.

Hero Electric’s looking at moving into the fast-track now and has just raised ₹160 crore that will be spent on a mix of R&D, manufacturing facilities and crucially marketing. Says Munjal: “We need to do a lot of awareness-creation. If you talk to 10 people, only two will have heard of electric vehicles.”

Other two-wheeler companies are driving ahead too. In Bengaluru, Ather Energy, the EV-maker funded by Hero MotoCorp, Tiger Global and Flipkart founders Sachin Bansal and Binny Bansal, is setting up charging stations around Bengaluru and offering numerous schemes for its slightly costlier bikes which feature remote diagnostics and even parking assistance.

Another company, Twenty Two Motors, which makes the Flow e-scooter, has received a $65-million investment from Taiwanese company Kymco. Twenty Two aims to build a plant and localise battery production with the funds. Some Kymco e-scooters will also be launched in India with Twenty Two.

Charing networks

Can electric two-wheelers take off without creating comprehensive charging networks in places where they’re being sold? Several companies are addressing that issue. NTPC’s tied up with fleet aggregators like Ola and Zoomcar to set up charging networks and it’s also talking to companies like HPCL and IOC. Ather, too, is putting up charging stations around Bengaluru.

In Delhi, EV Motors’ Vinit Bansal is moving cautiously, looking at establishing 20 charging outlets in Delhi and NCR in the next six months. Says Vinit Bansal: “We want to be sure what we do is within the law. There’s no clarity in terms of what approvals we need.”

Still, Bansal’s looking to expand to 15 cities in the next 12-18 months. His charging network will feature an app enabling bookings at charging stations and say which ones have the right type of charger. “We want to iron out bugs so by 2020 we’re in a position to scale it up,” he says.

Bansal’s confidence about spending to build the network has been fuelled by the big auto companies’ plans to introduce EVs. He says if EVs take off quicker-than-expected, the company’s ready. Maruti, meanwhile, is testing an EV possibly based on the WagonR.

Kia Motors, which is about to launch its first vehicle in coming weeks, has said it will introduce electric and hybrid vehicles by 2021, by quickly adapting its global models. Similarly, Volvo’s readying to assemble electric and hybrid vehicles in India by end-2019. In September, Ashok Leyland too opened an EV facility where work will be carried out on a range of new products.

The auto majors will be pushing for the government to give more support to hybrid vehicles in the coming years. Auto industry experts argue hybrids would obviate the need for an extensive network of charging stations. It would, of course, also be a way of saving a large number of components firms that might be put out of business if EVs take over the roads totally.

The immediate future of EVs lies with two-wheelers and public transport, experts say, but further out, as battery prices fall, there will be an increasing number of electric four-wheelers. One thing for sure is that the vehicle industry better buckle up for the disruption ahead.