By Rahul Thakur
The electric two-wheelers have been fueling the country’s electric vehicle adoption story so far. Besides the few established conventional two-wheeler brands, several startups have been coming up in the space with their attractive electric two-wheelers. How the emergence of the e-two-wheelers are boosting the growth of EVs in India?
The automobile industry all over the world has been witnessing a disruption. The UN Convention on Climate change in 2015, had set orders for every country to reduce the carbon imprints to save the planet we live on. Driven by technology, there are four major technological trends: shared mobility, connectivity, electrification, and autonomous driving. These are leading the automotive industry.
How will they benefit? These will shift markets and revenue pools, change mobility behaviour and build new avenues for cooperation and competition.
Now, the transportation sector adds to the 70% use of all fossil fuels worldwide. India has initiated measures and policies prescribed by the NITI Ayog, where we aim to convert to 100% electric vehicles by 2030. Standard vehicles are thus being replaced by electric and hybrid vehicles as they are more environment-friendly and cleaner. The electric evolution hence has to begin more efficiently and the markets have to be geared by the automotive market in the two-wheeler category.
Take electric bikes for instance. They are driving and representing technological advancements developed to keep urban mobility alive and create cities that are not only intelligent but also ecologically clean. These two-wheelers can hence be called representatives of a rather new concept: micro-mobility. The future of electric vehicles in India has a wide market and since its introduction in 2015, has shown growth that is steady. Two-wheelers have dominated the Indian automobile market and account for almost 80% of the total market share. Studies suggest that in 2018, the sale of two-wheelers doubled to 54, 800 units compared to financial years before this one.
The main agenda of the EV revolution is reducing carbon dioxide emissions and the dependence of standard vehicles on fossil fuels.
Electric two-wheelers: The transition and challenges
The transition to EVs requires a technological shift in manufacturing technology from ICE to EV and supportive charging infrastructure.
NITI Ayog has cautioned the 2-wheeler manufacturers to pull up the socks or lose their share to the Indian start-ups who are buoyant and vibrant in the two-wheeler segment.
The nature of electric vehicles on two wheels is plug-in. The vehicle is driven by electricity that is stored onboard in rechargeable batteries. This transition to be successful would require a technological shift in manufacturing technology from ICE to EV and a supportive structure too.
Compromising 9.4 million pa, China leads the world in Electric vehicles.
Other countries, too, are leveraging on this golden opportunity of meeting the world’s demand for electric vehicles efficiently. India is leading the pack in making the country EV reliant in the upcoming decade.
NITI Aayog since the very beginning has been giving signs and for 2 years has also cautioned the two-wheeler manufacturers to pull up their socks and buck up.
Shifting to two-wheeler EV ecosystem dynamics
Let’s have a look at all the dynamics of shifting to a two-wheeler EV ecosystem.
- Operational costs: Electric vehicles are very economical. For two-wheelers, EV over ICE is a choice that will help save on operational costs. The cost of Diesel/Petrol per kilometre on ICE comes up to Rs 1.5/2 per kilometre. On contrary, in EV the cost adds up to several times lesser. It works out to an average of Rs 0.06 to 0.4 per kilometre. No additional maintenance cost is also a perk when it comes to EVs.
- Vehicle price (The initial investment): Two-wheeler EVs with home plug-in and slow recharge is actually that not expensive. They can serve the purpose of going short distances and comes in handy to commuters, depending upon the additional features, these can cost something from Rs 25,000 to Rs 60,000.
Enhanced power bikes have been now designed to perform at par with the ICE vehicles, be it speed, acceleration, distance per charge, etc.
Hence, the initial cost of these vehicles is slightly higher. It is in the range of Rs 1,00,000 to 3,00,000. The difference in pricing over a few years can be offset by savings in operational costs. Manufacturers now offer many options of purchasing with monthly payment facilities. With more R&D in place happening in the automobile industry, the costs are more likely to lower down and will result in the evolution of alternate batteries and power storage management.
1.) Charging options: All over the world, there are two options for charging EVs:
- Plug-in charging stations: More often electric vehicles prefer the use of the standard slow charging system which can be conveniently charged at any point. Private charging or Home plug-ins is the most convenient way of charging an EV. To fully charge an EV, can take up to 6 to 8 hours. Public charging stations are ideally designed to dispatch AC and DC power. They are positioned at supermarkets, coffee shops, supermarkets, parking places, and Malls, which are places that are usually accessed more by people. DC chargers are more expensive than AC but are efficient and can charge the vehicle in 30 minutes.
- Swappable Batteries: The most convenient option in the EV segment has to be swappable batteries. The best feature is the ultimate convenience and overall price.
- Public charge points for EVs: The setting up of public charging stations have been delicensed by the Central Government. It has prescribed one charge station every 3 km X 3 km radius and at the distance of every 25 km on either side of the highway. Residents and commercial buildings also should adopt the EV Charging infrastructure.
The transition highly depends upon the development of the charging stations and their proper infrastructure. Private players in this sector are already in the market.
2. FAME (Faster Adoption and manufacturing of EVs): The approval of the proposal for the implementation of a scheme called the FAME-II India which is the abbreviation of Faster Adoption and Manufacturing of Electric Vehicles was approved by the Union Cabinet which was Phase II for the promotion of electric mobility. An outlay of Rs 10, 000 crores was announced under the scheme by the government to boost the market of EVs. Rs 1000 crores of this was set aside for setting up E-charging stations. An incentive of Rs 10,000 per KW is offered to OEM vehicle manufacturers according to the size of the batteries. States also have been asked to come up with their EV policies.
3. State government support: In perfect sync with the Central Government’s policies, states must promote Electric vehicles with the correct blend of incentives, sops, and ecosystem. States like Karnataka, Delhi, Uttar Pradesh, Maharashtra, Telangana, Andhra Pradesh, Kerala, and Uttarakhand have their policies in place. The Karnataka Govt. intends to make Karnataka the electric vehicle capital of India.
Demographics and factors affecting the customers:
- Gender: 64% of the users are estimated to be Male and 36% are Female.
- Age-wise distribution: The majority of users fall in 32% in the age group of 30-40 years.
- Monthly income wise distribution: Rs 10,000-20,000 pm is the approximate income 36% earn.
The Major factors that influenced the customer’s decisions on buying EVs narrowed down to Economy, Design & Aesthetics, and Social factors.
In the modern world, where everyone in each sector has so much to offer, customers are spoilt for choices. So, the EVs have to be at par with the Standard vehicles in terms of style, design, looks, technology, efficiency, convenience, and power.
That being said, the conventional two-wheeler market in our county is expected to grow at the rate of 7.33% annually. It is estimated to reach from 21.19 Million in 2019 to 24.89 Million in units by 2024.
The EV industry has great potential and is a great chance for the Indian automobile industry. Our country has great potential and is on its way to becoming a World leader in Electric Vehicles by 2030 with its fast adaptation and efficient infrastructure management.
(Rahul Thakur is Head of Marketing at Matter.in)
(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Autofintechs.com. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)