Electric two-wheeler business in top gear as Covid-19 provides big push

The push for electric vehicles has been a long time coming for India, and the limited mobility during and post lockdown has created a window of opportunity for firms in the e-bike space

Even as the Covid-19 pandemic forces most businesses to remain shut or find unconventional ways to survive, a surprise winner could be the electric bikes and two-wheeler business. The push for electric vehicles has been a long time coming for India, and the limited mobility during and post lockdown has created a window of opportunity for firms in this space. 

Take for example Ather Energy, the most promising and well known electric two-wheeler start-up based in Bengaluru. On Monday, it announced a new partnership with ride-sharing platform Bounce, which will now allow users to buy and rent Ather vehicles through the latter's app. 

Reopening its centres in Bengaluru and Chennai only last week after the near two month lockdown, Ather has also reworked its ownership models, increased financing options available to customers and introduced batteries on subscription. 

Similarly, larger and more established players such as Hero motors are also directing their efforts towards their electric vehicle and two-wheeler lines. 

According to research by TechSciResearch, the Indian electric two wheeler market stood at around $27 million in 2017 and was expected to grow at a compounded annual growth rate of over 41 per cent to reach $200 million by 2023, as the need to curb air pollution gains momentum. 

Last year, the Indian government also stepped up efforts for creating an enabling infrastructure for electric vehicles. From providing customs duty exemptions on lithium-ion cells to incentivising buyers of electric vehicles, the 2019 Budget pushed electric vehicles to a mainstream conversation in the country.

The push was driven in part to compete with China, and also to help the growing problem of air pollution in India. Electric motorbikes have already proved practical in China, where more than one million are estimated to have been sold in 2018 alone, and over three million electric two-wheelers already on the road as of October last year, according to a story in the Nikkei Asian Review. 

While regulatory and policy incentives are one part of the story, the market and analysts have all largely believed that large scale adoption of electric vehicles will be spurred by the market. And the Covid-19 pandemic might turn out to be that unexpected opportunity. 

The need for social distancing and apprehensions about using public transport are likely to be catalysts. 

With the lockdown extending well over two months now, the only companies that have had constant business are food delivery aggregators like Zomato and Swiggy, grocery and daily supplies providers like Big Basket and logistics players like Delhivery. A little known electric two-wheeler mobility platform eBikeGo has a presence in all these firms. 

Earlier this month, it began a monthly subscription for business customers beginning at Rs 3,600, helping them maintain social distancing and preventing use of pubic transport amid the ongoing pandemic. 

The Amritsar-based firm began operations in 2017 and currently operates in eight Indian cities- Bangalore, Mumbai, Delhi, Jaipur, Hyderabad and Vijayawada, and plans to move into more cities soon. At present, more than 300 scooters of eBikeGO are running under this subscription model since it was launched earlier this month.

"As of now, we are getting a good response but so many people are comparing this service with EMI. eBikeGo is not only providing the scooter, we are providing the entire solution to our customers which includes advanced IoT system, service, maintenance and 24/7 roadside assistance," said co-founder Irfan Khan.

The company is aiming at a two per cent market share of the Indian electric two-wheeler market and expects to bring on the road a fleet of 200,000 bikes in about 100 cities across the country.

More smaller players like these are eyeing similar opportunities and are likely to succeed because of the affordability and easy availability of their vehicles.  "We are sourcing it (scooters) through industry's top most OEM's and most of these companies don't depend on China. So, we have enough supply to fulfill our demand," Khan said. 

Anyone can book a scooter starting from one month to 18 months subscription with a special pricing. The company is also providing helmets and specially designed full-face masks for drivers at some extra cost. The firm is also planning to start providing additional accessories for drivers. 

The scooters take three hours to fully charge and run for 70 km at one go. They can take a load of up to 200 kg, and the company provides 24X7 roadside assistance for their customers.

"While encouraging the sale of private EVs (electric vehicles), India’s focus, at least in the first few years, should be on small, public and rural transportation. It is possible for India to have a unique impact and scale early with two-wheelers and three-wheelers, including three-wheeler goods vehicles," said a recent report from NITI Aayog, which suggested a broad policy framework to encourage the use of electric vehicles in India.

In the long term, Khan does not rule out working with governments and sectors other than delivery and logistics, "but not at the moment, we are concentrating more on corporates to provide them with personal mobility," he added.