E-scooter segment in top gear

The electric two-wheeler (E2W) segment in the country has moved on to the fast lane, aided by government subsidy, rising fuel prices, and a decline in the cost of lithium-ion batteries. Several E2Ws launched in the past year are priced almost at par with those running on internal combustion engines (ICE), which have traditionally been the more affordable choice.

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According to a recent report by Motilal Oswal Financial Services, the two-wheeler segment has witnessed considerable price inflation due to regulatory changes, and the cost to the customer has risen by around 25% till January 2021, compared to April 2018. At the same time, it adds, the cost of lithium-ion batteries has declined by about 24%. As per the report, e-scooters offer a 10-20% lower cost of ownership (on a per km basis), as compared to ICE scooters (both 100cc and 125cc).

Brands operating in the E2W segment are rejigging their strategies to appeal to the commuter segment and the biker community. Hero Electric, Okinawa Scooters, Ampere Vehicles, Ather Energy and Revolt Motors are the top players in the E2W segment in India in 2020, according to the Society of Manufacturers of Electric Vehicles (SMEV). Overall, 25,735 units of E2W were sold in 2020, according to SMEV. Of late, the segment has witnessed the entry of mainstream original equipment manufacturers (OEMs) such as TVS Motor Company and Bajaj Auto.

All charged up

Eyeing the commuter segment, Hero Electric rolled out a City Speed portfolio and introduced three new bikes (scooters) In October last year — Optima-hx, Nyx-hx and Photon-hx. These are priced in the sub-Rs 60,000 range (ex-showroom), while ICE engine scooters, which target the same set of consumers, are priced between Rs 39,990 and Rs 1.60 lakh.

“A consumer will spend only Rs 12 per day while using our vehicle for daily commutes, which is even lesser than Rs 30 that would be spent on public transport,” says Naveen Munjal, MD, Hero Electric. He says about 85% of the company’s customer base uses their vehicles for commute, and not as a lifestyle product. To drive adoption of these bikes, the company has come up with a ‘three-day-return policy’, and extended its warranty to five years, from three years, considering consumers’ concern about the low resale value of these vehicles.

Kabira Mobility, which also operates in this segment, has scooters priced below Rs 75,000; its recently launched bikes Kabira Mobility KM 3000 and Kabira Mobility KM 4000 are priced at Rs 1.26 lakh and Rs 1.36 lakh (ex-showroom), respectively. “Most vehicles in the market currently have a range below 100 km, however, our bikes offer 150-160 km in one charge,” says Jaibir Siwach, CEO, Kabira Mobility, which has 50 outlets currently in South and West India.

To encourage trials, these companies are tying up with biker communities. Ather Energy has also introduced test ride outlets, apart from its dealerships in 12 cities that are designed as experience centres. “Our outlets are spread over 2,000-2,500 sq ft to give consumers an experience of the brand. We hire only engineers in our sales team who can clear any doubts consumers may have about our vehicles,” says Nilay Chandra, director – marketing, Ather Energy. The company plans to add 25 dealerships by the end of 2021.

Battery about to die?

The lack of adequate infrastructure (charging stations) and the limited range offered by these vehicles could be the two big impediments for these companies as they try to gain scale. “There is range anxiety in the minds of the consumer; they are doubtful whether they will be able to complete their ride in one charge,” says Rajeev Singh, partner and automotive leader, Deloitte India.

Besides, while petrol or diesel refuelling stations are spread across the country, it could be a struggle to find charging stations for E2Ws.

Apart from allaying these fears, Preetam Mohan Singh, senior vice president, Praxis Global Alliance, says in order to achieve scale, these companies need to take initiatives to offer charging infrastructure every 4-5 km. “Currently, battery accounts for 40% of the total cost of EVs, and reducing this might bring major disruption in the market,” he adds.

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