3 min read.Updated: 09 Sep 2021, 01:16 AM ISTRangoli Agrawal,howindialives.com
The number of electric two-wheelers registered in 2021 so far has doubled over 2019 and 2020 levels. Behind this surge is a growing convergence of factors, including launches, high fuel prices, government incentives, investments and customer acceptance.
When Ola Electric unveiled its first electric scooter on 15 August, a notable response came from Tarun Mehta, co-founder of Ather Energy, a key rival and an early starter in the same space. Calling it a “big win" for the electric vehicle (EV) ecosystem, Mehta tweeted: “Great to see the @OlaElectric launch. Will push up EV volumes up even more and will drive more awareness." He also expressed hope that legacy automakers would convert their capacities to electric soon.
Those words embody a journey that is as much about individual entities like Ather as it is about a collective reshaping of the Indian automobile industry. That reshaping is gathering pace, especially in two-wheelers. In the first eight months of 2021, EV registrations across all categories were already 91% of the 2019 number, shows government data. Last year had seen a dip because of covid-19.
Two-wheelers are the standout EV category, doubling in size. A total of 57,187 two-wheeler EVs have already been registered in 2021, against 25,487 in all of 2019. These numbers could spike further with the launch of Ola e-scooters, which reportedly registered about 100,000 pre-bookings on its announcement day on 15 July for a refundable amount of ₹499.
E-scooters and motorcycles make up about 37% of all EV registrations this year, up from a 19% share in 2020. And though EVs still account for only 0.8% of two-wheeler sales, a lot of factors are converging to shift them to a higher gear—from new launches and high fuel prices, to government incentives, investments and growing customer acceptance.
At present, Hero Electric (unrelated to Hero MotoCorp) is the leader in the two-wheeler EV space, with a 33% market share. Behind Hero are a bunch of startups such as Okinawa, Ather, Ampere and Pure. Aiming for scale, Ola Electric is expected to join them. It has so far raised $407 million in funding, against $102 million by Ather, according to Crunchbase.
Missing in this big picture are traditional two-wheeler giants Hero MotoCorp, Bajaj Auto and TVS. As electric adoption picks up, they could join the bandwagon, too.
Some battle lines are being drawn, indeed. Pawan Munjal’s Hero MotoCorp is looking to launch its EVs next year. This will pit it against Hero Electric, run by Munjal’s nephew Naveen. According to the nephew, a family pact gives him, not the uncle, the rights to use the popular ‘Hero’ brand name for EVs. This could be contested by Hero MotoCorp, which has also invested in Ather.
Two-wheeler EV models currently in the market take on a wide range in terms of distance travelled on a single charge, top speed and price. Hero, with 10 models, has spread itself the widest, from the base till the middle end. Ampere is targeting the lower end of the market, while Ather and Ola are positioning themselves at the top end, shows data from JMK Research. At the lower end, the range is around 50-60 km per charge and the top speed is around 25 km per hour.
Ather, at the upper end, has a range of 75-85 km per charge and a top speed of 80-85 km per hour. Ola is positioning itself to offer greater value than Ather in terms of range and top speed—at a lower price. While it received a good response in pre-bookings, its real test starts now. Ola will start bookings on 8 September, with deliveries commencing in October.
The EV sector in general, and the e-scooters segment in particular, have tailwinds behind them. One push is coming from incentives from several state governments, such as waiver of road tax and registration charges, and upfront reduction in price. This is also shaping adoption. While Uttar Pradesh leads all states in the number of total EVs registered in 2021, a lot of those are e-rickshaws. In e-scooters, Karnataka, Tamil Nadu, Maharashtra and Rajasthan are the leaders.
According to JMK Research, battery prices (40% of the cost of an e-scooter) are expected to fall below $100/kWh after 2024. At this price, EVs start to reach price parity with two-wheelers running on petrol. JMK expects the share of electric in two-wheeler sales to increase from 0.8% in 2020-21 to about 17% in the next five years, clocking a compound annual sales growth of 84%. Ola’s upcoming debut will be a big test of this supernormal forecast.
(www.howindialives.com is a database and search engine for public data.)
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