Electric models to help scooters close gap with mobikes: Experts

Will the domination of motorcycles, which account for nea¬rly two-thirds of the 20 million two-wheeler market per annum, lurch tectonically to the scooter now that electric versions are available? If you ask some of the start-up electric vehicle (EV) two-wheeler manufacturers, such as Ather Energy, and Hero Electric, the answer is a resounding yes.

Ola Electric projects that electric scooters will dramatically push penetration of two-wheelers up nearly threefold. Analysts predict the ratio will be 50-50. However, ICE scooter players say no one can predict a four-to-five year scenario in such a dynamic market.  

Hero Electric Managing Director Naveen Munjal believes the current 33-66 ratio between scooters and motorcycles will change in the next four years because it’s part of a global trend where the 100cc and 125cc ICE equivalent two wheeler segment is getting converted to electric scooters.

“Mobikes need more power and more speed, which means larger and non-portable batteries and the form factor leads to challenges. We see scooters dominating in the short- and medium-term. They are al¬ready over 90 per cent of EV sales anyway,” said Munjal.  

Ather Energy co-founder and CEO Tarun Mehta endorses this view, pointing out that the scooter market will dominate the overall two wheeler market as per capita income increases from $2,500 to $4,000. “In the next 5-10 years, scooters will be the bigger opportunity in the EV market. The two-wheeler market today is 2:1 between mobikes and scooters. This will flip.”

He admitted that earlier he had not been confident even about the viability of the EV mobike in India, but now that prices were coming down and the government support was forthcoming, Ather might look at specific segments in mobi¬kes in the future.

Mehta expects sales in the total two-wheeler market of ICE and electric scooters to rise from 6-7 million pa currently to around 10 million per annum in the next couple of years and to continue growing.

Analysts, though, believe the switch from mobikes to scooters will be more gradual. Harshvardan Sharma, head of auto retail practice at Nomura, thinks the scooter share will increase to 50 per cent in an optimistic scenario. “But the bulk of sales of two-wheelers come from rural India where there is a default predisposition for mobikes,” said Sharma.

In fact, 90 per cent of the rural market comprises mo¬bikes and Sharma thinks they will retain their importance because of higher mileage, ruggedness and their multiple life cycles (second-hand and third-hand converted to motorised rickshaw).

Varun Dubey, chief marketing officer at Ola Electric Mobility, said that two wheeler penetration in India is low, at around 12 per cent and he thinks this will grow in the next few years to the same levels as Vietnam and Indonesia where it is 30-40 per cent.

It’s this expectation that underlies Ola’s prediction that the entire two-wheeler market will become electric in four years.

“This increase will be possible because of electric which is 80 per cent cheaper to maintain and run. Also, new forms which were not possible in ICE will come in such as electric cycles or kickback mobikes, offering consumers multiple choices of transportation apart from scooters and mobikes,” said Dubey.

As to how the big ICE players look at the change, simply put, they say it’s impossible to project. As the executive of a top two wheeler company said: “Who has a device or magic wand to say one way or the other? Only time will tell.”