Electricity on two wheels

It boasts of really low running costs, doesn?t require registration or a licence to run and doesn?t pollute the environment. Just when ?conventional? petrol-run two-wheelers are finding the going tough in the market and are suffering from declining sales, electric two-wheelers are turning out to be a viable option for customers and companies alike. In the process they are cornering a fair share of the market in smaller towns and cities.

Though yet to command a noticeable chunk of the two-wheeler market, electric cycles and two-wheelers?primarily short-haul low-speed vehicles?look set to create a new segment, prompting many companies to go in for manufacturing these e-vehicles.

As many as 20 electric vehicle (EV) companies are estimated to have sprung up across 10 states in the last 15 months to cash in on the rising acceptance of these environment-friendly vehicles with consumers for whom these are proving to be viable and cost-effective alternates to bicycles, mopeds and even scooters.

?The electric vehicle category is witnessing exponential growth and we expect numbers to rise manifold in the coming years. According to a report by A C Nielsen, the potential of electric vehicles for this fiscal is 2,00,000 units which is projected to grow by 1.5 times to 5,00,000 units in 2008-09,? says Deba Goshal, Director Marketing of Ultra Motor India.

The UK-headquartered Ultra Motors has a technical collaboration with Indian cycle major Hero as part of which the companies are rolling out e-cycles and e-scooters across the country. While the e-cycles are priced between Rs 15,000-Rs 20,000, the e-scooters retail between Rs 24,000 and Rs 28,000. Ultra says the running cost of the battery-run vehicles?that can go between 40 and 70 km on a single charge?is as low as one-tenth of a conventional petrol-run scooter and the maintenance cost is also substantially lower.

?There is scope to convert at least 10% from the lifestyle bicycle, scooter and moped segment that is estimated to have a size of four million units annually, with bicycles accounting for the majority three million,? says Goshal.

As part of the technical collaboration agreement, Ultra provides the electric vehicle technology and complete Ultra ?Power Pack?, consisting of the company?s electronic controller, specialised battery and charger. On its part, Hero Cycles is responsible for the mechanical integration and assembly, manufacturing and service of the final vehicles.

?We have so far opened 25 showrooms in the north and plans are in place to have an extensive dealer network in 16 major cities across the country by March 2008. We plan to go to Gujarat and Maharashtra in this quarter and move on to south by December. In the first quarter of next year, we plan to go to markets like Madhya Pradesh, Eastern UP, West Bengal and Orissa,? he said.

The target profile of electric vehicle companies include 12-18 years olds (primarily bicycle riders) and other adults in smaller cities, primarily not. ?Surprisingly, even the elderly are also emerging as a potential customers of these bikes as they prefer a slow speed and lighter vehicle,? says Goshal.

Indus Elec-trans, a subsidiary of Gujarat-based Electrotherm, is also a significant player in the nascent electric bike market in India and sells them under the ?YObykes? brand. Electrotherm Director Operations Avinash Bhandari says the company sold more than 30,000 ?YObykes? last year and expected the numbers to be substantially higher at about 1-1.5 lakh units this fiscal.

?We currently have 200 ?YO World? showrooms across the country, which are triple-S centres catering to sales, service and spares,? Bhandari said, pointing out that a robust after-sales network was an important criteria to boost consumer confidence in the new breed of vehicles. ?You see, a roadside repair chap cannot take care of our vehicles. Therefore, we have ensured that there are enough service and spare back-up available to our customers,? he said.

Not only is the running cost cheap, the companies are also ensuring that spares and accessories of the vehicles also come in cheaper. ?The replacements are also not expensive and most of the spares like plastic body parts are produced after vehicles are produced,? Bhandari said.

According to him the battery was the only part that needed to be changed after about three years as it had a life of about 20,000-25,000 kms. ?This costs about Rs 5,000-6,000 and this is not much, considering the minimal affect it has on the overall running cost,? he said.

Explaining the low running cost concept, Bhandari said a one-time charge on the electric bike consumed about a unit of electricity and ran the vehicle for about 70 kms. ?If we take the average price of one unit of electricity to be Rs 5, then we are talking of great efficiency. Taking the average petrol price at Rs 50 per litre, a similar cost on an electric bike can run the vehicle for 700 kms,? he said, adding that price range of ?YO bykes? is between Rs 15,000-29,000.

The bikes are also proving to be quite popular with corporate clients who may buy them for their staff. Companies with very large industrial complexes, courier and other delivery companies are looking at these bikes for their staff. This not only helps them care for the environment but also keeps the running costs low despite high usage.

However, despite their excellent value proposition, the electric bikes have their own share of shortcomings. Low speeds, high charging time and difficulties in repair are some of the major irritants and problems the vehicles face. In fact, the vehicles can run without a licence or registration precisely because they are low speed vehicles.

Abdul Majeed of Pricewaterhouse feels that it will be some time before the vehicles actually catch the fancy of ordinary mass commuters. ?Slow speed and hassle of battery replacement means that people are not very excited with the product in a big way. Companies have to work out of this and see how to tackle this,? Majeed said.