A mega ride

Ola's e-scooter plans can disrupt the two-wheeler market

The launch of three electric scooter models, two from ride-hailing company Ola and one from start-up Simple, can substantially disrupt the two-wheeler market. Ola’s plans are gigantic — it is targeting sales of 500,000 units in the first 12 months and intends to ramp up annual capacity to 2 million, which would make it one of the biggest manufacturers in the world. If Ola achieves the scales it is targeting, it will give a push to develop charging infrastructure. Policy will have to be supportive to make the venture successful. Both companies have priced their respective vehicles near the Rs 1-lakh mark, thanks to the subsidy for e-vehicles. Both are claiming high-tech features like Bluetooth connectivity to smartphones, digital controls and touchscreen displays, voice recognition software, geo-fencing locks, and sophisticated anti-theft features. Claimed performances with top speeds of 100 km-plus, and ranges of 120 km plus on one charge, make these comparable to conventional fuel vehicles. These e-vehicles also offer easy charging options from normal power sources. All these high-end features put them a technological generation ahead of currently available e-scooter models, and make them more attractive to a younger demographic.

Several models of electric scooters are already available from companies like Bajaj, TVS, and another start-up Ather and Hero Electric. But these have not proved popular. Estimates suggest just over 25,000 e-scooters were sold in the pandemic-affected calendar 2020 and around 30,000 have been sold in the January-June 2021 period. Contrast those sales with Ola’s claim that it had 100,000 bookings before the launch last weekend. The caveat of course is that booking an Ola scooter required only a small refundable deposit of Rs 499.
 

An ecosystem of sundry component suppliers is required to enable an operation of this scale. While there’s little clarity on the import share of components, there is a strong incentive to produce locally. The value chains of auto-manufacturers also generate employment and the repair and maintenance industry would have to rejig its skill sets and take on new personnel. If e-scooters catch on, there would be a need to rapidly build a charging network to keep these vehicles running. Policymakers must be proactive to ensure this demand is met. This could, for example, require a review of power-metering norms, and easier permissions to set up charging points in locations like bus stations, petrol pumps, parking lots, apartment buildings, and office complexes. This would be at state and municipal levels. Ideally, national standards should be set for e-charging equipment to ensure different models can be recharged at the same power outlets.

Another thing that’s necessary is a review of road safety standards and standard operating procedures for emergency services such as the fire brigade and police. Electric vehicle safety has different parameters. There are no fuel tanks to explode. But batteries can explode, or emit poisonous gases. If an e-vehicle catches fire or suffers a short-circuit, it must be doused using electrically neutral foam. Higher e-vehicle penetration would cause a paradigm shift, apart from generating employment and changes in value chains. Besides being zero-emission, an e-vehicle would have a lower carbon footprint, especially if renewable power sources catch on. Going by the China experience, electric two-wheelers could potentially dominate the urban Indian landscape. It’s refreshing to see ambitious start-ups in this space. It is up to policymakers now to ensure there are no hiccups during the transition period.