By Himani Jain – Senior Programme Lead, and Nilanshu Ghosh – Research Intern, Council on Energy, Environment and Water (CEEW)
The automotive sector in India is dominated by two-wheelers (2Ws), with ~150 million two-wheelers on the road occupying 73 per cent of the market share. According to an analysis by the Council on Energy, Environment and Water (CEEW), this number is projected to almost double by 2030. Further, a pan-India survey conducted by CEEW shows that about half the urban population uses two-wheelers for their weekly needs. Thus, as India charts a path towards an electric vehicle (EV) transition, two-wheelers must be its torchbearers.
Even though any new EV entrant is likely to face a range of barriers from an inadequate supply chain to consumer demand, a range of new EV players are entering the market, with existing ones ramping up their plans and market strategies. However, as far as the demand is concerned, the lack of adequate range, charging infrastructure and upfront costs are being cited as barriers among Indian consumers.
- Range comfort: The CEEW survey finds that the average commute distance of 2Ws is 16 km/day. Most of the available electric two-wheelers (e-2Ws) in the market boast a range of 80-100 km per charge. The higher-end models offer 100+ kilometres per charge, with some scooters providing 150+ kilometres per charge. Thus, the current range of the e-2Ws suffices for the average daily commute of an Indian citizen.
- Costs at par with internal combustion engine (ICE) scooters: The new amendment to the FAME subsidies have decreased the purchase price of e-2Ws by 30 per cent. Combined with the sky-rocketing petrol prices, it is now cheaper to own an electric scooter compared to a petrol one. The total cost of ownership (TCO) of an e-2W with the new subsidies is about less than one-third the price of owning a petrol scooter.
Figure 2- TCO analysis of available 2-Wheelers (CEEW analysis)
Additionally, state policies are also supporting the adoption of EVs through an additional subsidy on the purchase of EVs. The central government has approved the sales of EVs without batteries, bringing down the upfront cost of the e-2W by ~40 per cent.
3. Multiple charging options: Battery technology advances have led to a 40 per cent reduction in charging duration since 2015. Further, multiple battery charging solutions have been game-changers. These include battery swapping, fast charging capabilities, and residential low ampere plug charging. Now, the batteries can be easily removed from the scooters and charged at their convenience, thus creating possibilities for battery swapping. Removable batteries give consumers the flexibility to charge their batteries and softens range anxiety.
That said, there are some key challenges to e-2W adoption that remain to be addressed given their nascency.
- Repair and maintenance: The vehicle owners in India rely primarily on 3rd party mechanics for the regular repair of scooters rather than sending them to the dealerships. However, as EV technology is still new, not many mechanics are proficient with repairing these e-2Ws. A few manufacturers have taken up the initiative to train the mechanics with the essential skills that would help repair most models of e-2Ws in the market. In addition, more workshops and vocational training from the Original Equipment Manufacturers (OEMs) would ensure that the mechanics get hands-on experience repairing e-2Ws, providing easy repair options for the vehicle owners and job security for the mechanics.
- Sturdiness: To make e-2Ws sturdier, at par with their petrol counterparts, the OEMs need to use high quality but light materials in their e-2Ws. Any increase in the kerb weight will lead to efficiency loss. Since commercial fleet scooters need to deliver 150+ kg payloads, robust, sturdy models are being developed for commercial use. This has led to adoption of e-2Ws by ecommerce delivery firms such as Big Basket and Zypp for last-mile connectivity.
- Micro-Mobility: Population comprising women, teenagers with learning licenses, and older citizens rely on buses for long distances, and use autos or walk for a short commute. The micro-mobility segment offering e-2W models with speeds less than 25 kmph has the potential to be the dominant mode for trips between 2-5 km for middle-income groups. In addition, traffic calming to control speed, helmets and safer junctions are essential to ensure the safety of these slow e-2W riders. There has been an increase in the registered slow speed e-2Ws (Fig. 3) over the years, even though these scooters do not get subsidies under the FAME- II scheme.
Figure 3- Number of registered slow speed e-2Ws
Source: Vahan Dashboard
In the Indian EV story, two-wheelers are playing the predominant role. The electric vehicle ecosystem can expand further with the micro-mobility vehicle segments, trained after-sales workforce and sturdy models.