“We have recorded our best month in September, with one e-scooter sold every day,” says Sminy Devassy, owner of Ampere Electric’s franchise in Thrissur, a district in central Kerala. Ampere Electric, the e-mobility business of Greaves Cotton Limited, has otherwise sold more than one lakh e-scooters nationally since they launched thirteen years ago. In the case of another e-scooter manufacturer, Ather Energy, its CEO, Tarun Mehta, through a LinkedIn post on October 15, said that their sales in the past fortnight alone equaled the total sales in 2020.
One look at the data of India’s apex body representing the Indian automobile industry, SIAM’s 2020-2021 domestic sales trend, tells you why. All two-wheeler sales dipped in 2020 nationally. So compared to a year ago, is it picking up again as a category in general and a buzz around electric vehicles in particular? Has Sminy, who started this franchise at the cusp of 2020-2021 and sold more than 200 e-scooters, in the first three weeks of October, entered the EV business at the right time?
The Electric Vehicle (EV) Push: Business & energy-security?
20 Indian states, including Kerala, now have an EV policy, with more joining in. To help the common man make the shift, the cost price is down, with a subsidy or two. One, the central government’s Fame II subsidy and states are individually offering their own. Many have early bird incentives and schemes for battery packs like Maharashtra here.
The Kerala State Electricity Minister recently launched an online EV store and app for the state, passing on 50 % of the subsidy, first to government employees. In fact, Vehicle Registration data for two-wheelers, which in this case, shows motorcycles and scooters in the same category, is down in all Central and Southern Kerala districts, barring Ernakulam. Like it has been across India in 2021. Much of it is due to the pandemic, but are a few, in wait and watch EV mode?
At one level, this shift attempts to address national energy security. Fossil fuel based transportation is the second largest source of CO2 emissions, it has already caused over 50 % of the global energy consumption and the rising price of crude oil will continue to affect a nation’s trade deficit. Like much of the world is realising, a reset begins with shifting from a vehicle dependent on the internal combustion engine or ICE. To electric options. But is it here that EV companies like Simple Energy and OLA are aiming for the world?
OLA Electric’s live stream on August 15, was kicked off by its CEO Bhavesh Agarwal’s e-scooter launch, where he had this to say, “As we develop as a nation, we need to make sure many many more people get access to a two-wheeler. But we can’t make them gasoline two-wheelers — we need to ensure these are electric two-wheelers.” He went on to add, “scooters, which are urban mobility vehicles haven’t been innovated upon for decades. The scooters currently in the market are completely out of sync with the aspirations of India. They are boring, dull, slow, clunky and just don’t represent the future.” He then introduced the OLA S1 — the e-scooter which within a matter of two months, received over half a million bookings. Stepping up production capacity, deliveries are slated to begin October end, says the company. Although it is tight-lipped about final booking numbers.
Will India’s two-wheeler consumer adapt?
In India, 80 percent of all vehicles sold are two-wheelers, so it makes economic sense to innovate in this consumer segment. Even when sales are currently down in 2021, the number of Indians using two-wheelers has grown from a decade ago. While a little less than ten Indian companies are in the e-scooter space, global brands like Honda and Yamaha are currently doing feasibility studies in India, to see the world’s largest two-wheeler market readiness, for e-scooters in all aspects. Ask Sminy what her customers look for before deciding and she says, “Customers look for e-scooters with high power and high range. They generally buy with the intention of keeping it for 5-6 years, expect low maintenance and some people even get their e-scooter, to experience an electric vehicle for the first time as an experimental mission.” Her next statement is a reminder that this EV segment has also seen a boom and bust before. When EV bicycles of Chinese make were pitched as EV scooters, Indian EV companies like the one she has a franchise for, lasted out, “being an older brand under Crompton Greaves gives them credibility and trust to the customers, compared to the Chinese scooters. And now with petrol prices increasing so rapidly and moving beyond 100 rupees.”
CEO Tarun Mehta in the same post also says, “Smaller cities are producing an amazing EV story, beating most predictions (including some of our own). EVs are going mainstream now.”As a YouTuber with over 9000 subscribers, Hasna Nishaf, a quail farmer from rural Kerala might agree with him. She has recently bought one. She also quickly put out her cost-benefit analysis of EV use on her Malayalam channel, Zara the Farming Partner, “this e-scooter has helped me bring down my monthly running costs from 3000 rupees to just 150.”
Nikhil C Rimon, who works as a mechanic in the same store, comments on the maintenance cost for servicing, “we just check the batteries, brakes and do general maintenance for the services. After the initial 3 free services, a customer typically only spends about 300 rupees for each service afterward which includes a water service as well.”
The health benefits have been confirmed by a 2021 study conducted by the International Council on Clean Transportation which says that mass adoption of EVs with a market penetration of 67 percent by 2030 alone, would save Indians $10.3 billion in avoided health costs, due to decreased pollution. ‘This is under the conservative assumption that the additional power demand due to vehicle electrification is met through fossil fuel power plants. Additional policies to clean up India’s electricity grid could amplify the air quality and health benefits of vehicle electrification.’ The current leader in charging networks for electric vehicles in India, Tata Power, has already invested widely in solar and wind electricity generation.
While e-scooter startups like OLA Electric and Simple Energy, aim for export and the Indian market, the central and state governments gear up with schemes and subsidies, the road ahead is abuzz with change.
Gamechanger? Time and the price-sensitive Indian consumer will tell.
Cefil is a student of Mathematics and Environmental Studies at Ashoka University.
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