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Climate change and energy

Why two wheels are better than four in India’s electric vehicle push

EVs represent a tiny share of the nation’s auto market, but efforts to electrify scooters and rickshaws may begin to change that.
April 8, 2019
Ather Energy

In early March, in the parking garage of a Bangalore office building, I hopped onto the back of an Ather 450, a slick electric two-wheeler with lime accents and a molded white body.

I grabbed the shoulders of the unfortunate Ather Energy staff member tasked with showing off the scooter’s acceleration, torque, and handling, all without pitching a foreign journalist onto the pavement.

The young man accelerated down the parking structure, likely nearing the 450’s promised specs of 0 to 40 kilometers (25 miles) per hour in 3.9 seconds. He spun up several more floors before looping back down to our starting level, accelerating into the final stretch, and braking a few feet short of the awaiting publicist.

“I’ll take it,” I announced.

Ather, a six-year-old Indian startup that has raised around 4.8 billion rupees ($70 million), began taking pre-orders for its scooters last summer.

It's among a handful of companies now working to expand India’s nascent electric-vehicle industry, by delivering products designed for the particular quirks of the nation’s transportation system. Two-wheelers make up nearly 80% of the traffic on India’s roads, and relatively few people own their own vehicles otherwise, getting around instead with bicycles, trains, buses, auto rickshaws, and ride-hailing services.

Producing small and public electric vehicles provides the clearest path for India to cut the emissions, air pollution, and petroleum imports associated with its fast growing automotive industry, argued a report last year by NITI Aayog, a government think tank. With the right technologies, strategies and policies, it could also present as an opportunity to build a domestic industry that could compete globally in producing the next generation of clean buses, as well as two- and three-wheelers, it added.

India’s transportation emissions are set to soar in the coming decades as the nation's expanding economy enables more than two hundred million additional people to buy vehicles. A huge portion of those first purchases will be two-wheelers, many of which could be on the roads for more than a decade, says Venkat Viswanathan, an assistant professor focused on batteries and electric vehicles at Carnegie Mellon University. So it’s crucial at this point for companies to deliver attractive electric alternatives for this emerging class of vehicle owners, he says. 

Money and policy

As it stands, the electric-vehicle market in India is tiny, measured in the low thousands annually for new cars and the mid tens of thousands for two-wheelers. That represents barely a ripple in a nation of 1.3 billion people and more than 200 million registered vehicles.

But momentum has begun to build, at least behind electric-scooters sales, which more than doubled last year—driven, in part, by evolving federal efforts. In 2017, the government announced that all new vehicles would need to be electric by 2030. It subsequently stepped that back to 30%, amid criticism from the auto industry, but that was enough to get the industry thinking about EV strategies.

“The government has been pushing this in a big way,” says Tarun Mehta, chief executive of Ather. “So suppliers have gotten the memo that electrification is going to happen, and nobody wants to miss out.”

A number of companies have begun manufacturing electric cars, two-wheelers, or rickshaws for the Indian market or announced plans to do so, including China’s BYD, South Korea’s Hyundai, Japan’s Suzuki, and domestic automakers Ashok Leyland, Mahindra & Mahindra, and Tata Motors. Additional electric two-wheelers startups have also emerged, including Okinawa Scooters, 22Motors, and Orxa Energies.

Crucially, the government more recently backed its targets with substantial funds and stricter policies. In early March, officials announced plans to provide nearly $1.5 billion in subsidies for purchases of EVs and hybrids with advanced batteries (lithium-ion, not lead-acid), weighted toward public buses, three-wheeled vehicles for hire, and personal two-wheelers.

The initiative, which also earmarks funds for public charging infrastructure, doesn’t apply to higher-end cars. 

Photo of Ather 4 electric scooter connected to outdoor charging station
Ather Energy

Pay as you go

In the parking lot behind Sun Mobility’s headquarters in eastern Bangalore, on the edge of city’s sprawling technology district, a driver pulls an orange-and-black rickshaw up to the company’s “quick interchange station,” a squat stand of lithium-ion battery lockers.

After he swipes a key fob with loaded credits, a little black door pops open, allowing him to pull out a fresh battery with a green handle and return a nearly empty one. The man inserts the new battery into the open slot under his seat, repeats the process for his second battery, and pulls off in a fully charged rickshaw, all in less than two minutes.

Sun Mobility was cofounded in 2017 by Chetan Maini, a pioneer of electric vehicles in India. In 1994, he formed Reva Electric Car Company, which Mahindra & Mahindra ultimately acquired nine years ago.

But his early experience in the industry convinced him that the US model of selling high-priced electric sedans is not the way to kick-start the EV market in India, given the price sensitivity of average Indian consumers—and the premium on lithium-ion-powered vehicles in the nation. A standard battery pack could easily double the cost of an auto rickshaw, he says.

“Even if battery prices drop down, it will still be too expensive for India,” Maini says. “So the solutions have to be very different.”

He argues that switching to a pay-as-you-go battery-swapping model eliminates that sticker shock while easing anxieties about vehicle range, protracted home charging times, and limited total battery life.

Sun Mobility has created a standard battery-swapping platform that any manufacturer of three-wheelers, scooters, or buses can adopt, or that most existing fleet owners can add through a relatively fast retrofit process.

The 150-person company has struck deals with at least 10 companies to produce new vehicles equipped with their systems. It’s also converting 500 existing auto rickshaws in Delhi for SmartE, one of India’s largest fleet operators. In addition, Sun Mobility has partnered with Ashok Leyland, one of the nation’s biggest commercial vehicle manufacturers, to provide battery technology and swapping stations for the company’s Circuit S line of electric buses.

By next March, Maini expects to have at least 400 swapping stations up and running, each of which can do about 200 swaps a day. The battery lockers are housed under a transparent roof studded with small, square solar panels, which partially recharge the returned batteries. A separate robotic swapping system for buses, also on display in the company’s parking lot, can remove and replace the vehicles’ giant battery packs in three minutes. 

From two wheels to four

Ather is trying to attract EV buyers by delivering a scooter that’s fun, fast, and modern. The 450 boasts a top speed of 80 kilometers (50 miles) per hour and a range of up to 75 kilometers, with a low center of gravity that improves handling, the company says. It comes equipped with a touch screen that tracks battery charge levels, offers navigation, and highlights public charging facilities at cafés, shops, and other social spots. The entry-level 340 scooter model comes with a charging cable that plugs into a standard socket at home, while the company will install a charge point with surge protection and other features for buyers of the 450.

Ather Energy

The company’s initial models are on the high end for Indian scooters, above the price of a petrol-fueled Vespa: the 450 runs 124,750 rupees ($1,800), while the 340 costs 109,750 rupees ($1,590).

Still, Mehta says the electric scooters save about 17,000 rupees ($245) in annual fuel costs on average, on top of substantially lower maintenance costs. The company plans to introduce lower-cost models as well. Mehta says it has been delivering scooters to customers since January, but he won’t disclose sales figures yet.

While electrifying India’s scooters and rickshaws can go a long way toward cleaning up its transportation sector as it currently stands, the nation will also need to import or produce a growing share of electric personal passenger vehicles as well if it hopes to keep the industry’s emissions and pollution in check.

The International Energy Agency projects that car ownership could rise from around 20 vehicles per 1,000 inhabitants in recent years to 175 by 2040. Along with growing use of rail, aviation, and other modes of transportation, the trend would nearly quadruple use of transportation fuels over that time period.

But a rapid transformation is hard to achieve in a sector where it can take decades to turn over an existing fleet, even with the federal policies and well-funded startups. Bloomberg NEF’s report last year estimated that EVs will account for only 7% of the market by 2030, well short of the government’s lowered target (though those estimates haven’t been revised following the government’s new policies).

One major hurdle for deeper EV penetration in India will be the difficulty of charging the vehicles. There’s very little public charging infrastructure, residents have limited ability to set up charging systems in multi-unit housing, and electricity supplies are erratic in many parts of the nation.

Correction: This post was updated to correct a conversion of dollars to rupees.


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