The assembly line at a new facility in Hosur, a city in southern India close to Bangalore, is bustling with lightning-fast activity. Every 90 seconds, employees in black uniforms produce a brand-new electric scooter as management assesses the company’s soaring sales. Two-wheelers are moving at electric-powered speeds, according to Tarun Mehta.
Mehta, 33, is the CEO of Ather Energy, a producer of electric scooters that has recently experienced a surge in demand. According to him, the business was selling 200 units monthly three years ago. It now easily sells 15,000 copies every month. Mehta told CNN that revenues were “soaring.”
This is what India’s massive personal car market, which is expected to grow to be a $100 billion sector by 2030, looks like when it electrifies it. In the nation with the largest population, two- and three-wheelers predominate, outnumbering other forms of transportation like cars by a factor of nearly four.
Walking down a street in Bangalore or New Delhi suffices as evidence. In many busy roadways, electric mopeds that cost as little as $1,000 are already common. Environmentalists and the government promote them as a way to reduce some of the poisonous smog that frequently engulfs major cities across the nation.
In the previous three years, registrations for these vehicles have increased by more than 10 times nationwide. Many vibrant rickshaws in the Indian capital that were originally propelled by human pedalling now move people about the city using batteries. Established firms have made significant investments to electrify their products, including Hero MotoCorp, the largest two-wheeler manufacturer in the world.
India is attempting to become more environmentally friendly, with a goal of having electric vehicles (EVs) account for 80% of two- and three-wheeler sales by the end of the decade and a third of all private automobile sales by that time. The nation aspires to serve as an example for other developing countries by doing this.
However, according to experts, there are many significant obstacles along the road, including lowering pricing and strengthening infrastructure.
‘Revolution’ of the two-wheeled EV
“Over the last three years, an immense amount of momentum has been brought into the market,” said Brajesh Chhibber, a partner at McKinsey who also serves as co-chair of the company’s think tank on India’s future mobility.
According to him, there were one million electric vehicles sold last year, up from “an almost negligible number of units three years ago.” “What a leap,” you say.
Strong official backing has fostered the movement, especially through a programme called “FAME,” or the Faster Adoption and Manufacturing of Electric Vehicles.
The 2019-launched programme is investing more than 100 billion rupees (about $1.2 billion) in EV consumer subsidies and the construction of thousands of EV charging stations nationwide.
Subsidies have been a major factor in the recent adoption boom. According to Bain, when federal and state subsidies are taken into account, a high-speed two-wheeler in Delhi may now only cost 15% to 20% more than its diesel-powered equivalent, as opposed to up to 30% without subsidies. That has encouraged a lot of customers to switch.
Numerous startups are gaining from the move, including Ather, which views it as nothing short of a “revolution.” According to official data, it joins at least 55 other EV producers who have emerged to meet demand.
India, though, is only beginning. Despite reaching a significant milestone, the 1 million units sold last year pale in comparison to “India’s total two- and three-wheeler fleet stock of 250 million — leaving immense room for sustained growth,” as stated by the World Economic Forum (WEF).
These vehicles, including scooters, motorcycles and rickshaws, are crucial because public transport is still in its infancy and makes up an astounding 80% of all vehicle sales. The trend gives the nation an advantage as it transitions to EVs because, in the opinion of experts, such vehicles are often used more for daily short commutes than long-distance drives.
In a report published in December of last year, Bain predicted that two- and three-wheelers would be “the vanguards for EV adoption,” in part due to customers’ potential lack of range concern and increased reliance on “the adequacy of home charging.”
Early adoption by delivery and logistics firms, who are drawn to the cheaper operating costs of switching to electric and efforts to reduce their carbon footprints, is another motivating driver. E-commerce behemoth Flipkart and meal delivery juggernaut Zomato are two examples of businesses that have already committed to using only EVs as of 2030, according to Bain.
