Leading manufacturers of electric two-wheelers in India believe the ?future is electric? as urbanisation, automobile ownership, uncertain fuel prices and climate change are expected to play a major role in driving the market in the coming days.

The world electric two-wheeler market has grown from 23 lakh units in 2003 to 1.78 crore units in 2007 and is expected to touch the 20 crore-unit mark by the end of 2008, according to industry captains. Interestingly, China alone accounts for 75% of the global electric two-wheeler market with 1.50 crore units, followed by the US with 24 lakh units. Ever since its entry in to the Indian market two years ago, the electric two-wheeler industry is gaining ground substantially by notching up a year-on-year growth of 35% to 40% and by the end of the fiscal, this may well touch 3 lakh units.

With Electrotherm driving into the Indian market in 2006, India has seen many leading manufacturers with greenfield projects, including Ultra Motor, Hero group, TVS, Tube Investments of India, Atlas and the Lohia group. As many as 70 individual traders have taken a plunge into this business by importing completely knocked down kits (CKDs, needed to assemble a vehicle) from China and selling them in the market.

?With rising fuel prices, increasing urbanisation, cost of ownership, adherence to climate changes, a lower maintenance cost compared to petrol-driven two-wheelers, economy and convenience, it is expected that the industry will see a remarkable growth with five lakh units by March 2010, from the projected three lakh units by March 2009,? said Ganesh Mahalingam, MD, Ultra Motors.

MM Murugappan, chairman, Tube Investments of India Ltd, adds, ?The EVs are highly energy-efficient, least polluting, cost effective and come with reliable technology which can be easily upgraded in terms of speed, battery life and other parts. With 45% of the population working and fuel costs rising, India is poised to see a tremendous growth in the industry.?

Though the electric two-wheeler industry is relatively new to the country, its market is evolving very fast and is one of the most accepted concepts globally. Electric battery-operated vehicle technology is also more affordable compared to any other energy-efficient technology. ?Keeping in mind the growing traffic woes, EVs, with a speed limit of 25 km per hour, are free from registration and licences, and therefore, are very convenient for the consumers,? said Navin Munjal, director, Hero Exports.

According to Avinash Bhandari, director, Electrotherm, ?Petrol engine technology is in a mature state. Not much improvement is possible with respect to reducing exhaust gas emission. As the situation stands today, the only viable alternative to a petrol vehicle is an electric vehicle technology. Countries like China, where 75% of total two-wheeler sales come from EV market, have shown the world how the two-wheeler industry can grow with electric technology.?

Mahalingam agrees, ?A electric two-wheeler can be operated at 1/10th the cost of running a petrol-driven two-wheeler and at a much lower maintenance cost. The e-vehicles are fuel-free and hence cheaper to run by at least 80% and support cleaner and greener technologies.? India, on an average, sells seven million two-wheelers every year. The scooter segment is growing fast, at almost 14%. With this, the electric scooter segment is bound to grow manifold. The EV industry is targeting to substitute 10% to 15% of the total scooter segment. Of one million petrol-driven scooter market, the EV industry has already converted 15% in its favour and will bring in more customers into its fold, Mahalingam added.

KB Srinivasan, general manager, BSA Motors of Tube Investments, said, ?The e-scooter segment is addressing key customer needs as it is convenient to use (with light weight, safe driving, no gears, clutch or starter) and economical (with lower initial and running costs), apart from its enormous latent demand. The electric two-wheeler industry also has products designed for segment-specific preferences in features, colours, graphics and names and they have been extensively tested and validated for Indian requirements, thereby wooing young and techno savvy customers with dependable after sales, parts and service support, he said. Navin Munjal of Hero Exports says, ?Battery is an area of concern. A battery?s life totally depends on the driving/charging habits of owner and with modern technologies being in place, the industry is fully geared up to tackle any problem.?

The industry is not looking at particular consumer demographics. Anyone looking for economy, ease and eco-friendliness can immensely benefit from e-vehicles. People like working/dependent women, elderly citizens, small businesses/petty traders and delivery agents in the age group of 17-40years are ideal customers for e-vehicles, he pointed out.

Avinash Bahandari of Electrotherm said, ?It is very important that we design and develop components keeping the Indian customers in mind. With much higher specifications/performance, the electric vehicles are more suitable for Indian road conditions.? However, companies will have to invest heavily in technology platforms like battery, motor, controller, to keep themselves floating and growing, he added.

Srinivasan of BSA Motors said, ?Currently the industry is not growing at a higher pace due to poor quality and reliability of bikes supplied by traders with imported CKD kits from countries like China. Factors such as no after sales service, lack of finance and insurance coverage, inadequate supplies and lack of spare parts, difficulty in charging (battery) at public places, inadequate customer promotions and difficulties in registering in some states are major hurdles faced by the industry.

However, the industry believes that consolidation will happen with the closure of many trader-dealers while banks and lending institutions will come forward to finance the products in the months to come. ?We also hope that all states will come forward in promoting e-vehicles in a big way through some sort of incentives and packages? he added.

All the major manufactures of electric two-wheelers are gearing up to tap the huge potential in India with huge investment-cum-expansion plans. While Hero group is planning to invest close to Rs 100 crore for new products, expansion and modernisation at its plants, BSA Motors too, recently announced similar investments in expanding dealer networks and new products. Electrotherm and Ultra Motors are also investing in R&D, designs ,new products innovation, strengthening of supply chain and a strong distribution and dealers network.