The ingredients are coming together for a massive adoption in electric scooters. Many parallels exist between the emergence of China’s EV market and the near-term potential in India. Contrary to the West where the four-wheeler provides the electric foundation, China’s electric foundation was laid in electric bikes and scooters. India can follow the same path, but the adoption could be much faster. China’s electric dreams began small. It sold 40,000 electric two-wheelers in 1998 in the early days of electric push. But as battery quality improved and regulations supported the sector, sales grew to 1.7 million units in 2002. Post-SARS, in 2003, sales more than doubled to 4 million, and to 10 million by 2005. The customer sentiment was that electric scooters were better trade-offs to public transport (speed versus the bus, and convenience versus the subway), especially regarding the potential for spread of disease. This business opportunity created hundreds of companies in two-wheeler EV design, batteries, services, etc, and planted the seed for an EV ecosystem. This, along with incentives, provided the knowledge and manufacturing infrastructure to move on to buses and then cars.
China now accounts for about 99% of the total two-wheeler electric stock, or roughly 257 million vehicles. India sells 20 million two-wheelers per year (of these, 6 million are scooters). Scooter sales alone are more than two times car sales. Though EVs in the two-wheeler market are increasing, 2019 EV sales represent a tiny percentage of the market (126,000 units). Like any tech shift, a combination of factors can help adoptions reach inflection points and then take off. Electric scooters have a lower total cost of ownership than petrol ones. With battery costs trending downwards and battery recycling companies offering buyback prices, cost of vehicle will reduce.
Covid-19 has also increased awareness around pollution and a near-term preference for non-public transportation options. FAME-2 and other policies also keep nudging us towards that inflection point. Another positive trend has been e-commerce and delivery-based businesses. Electric scooters have significant tailwinds right now. The two-wheeler market offers India a unique opportunity to become a major EV country, and it’s also the fastest way to start reducing our emissions.
The author is founder of Lohum, the battery lifecycle solutions company.
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