Fire incidents unlikely to dampen electric two-wheeler demand | The Financial Express

Fire incidents unlikely to dampen electric two-wheeler demand

Despite several incidents of electric two-wheelers catching fire coming to light in the past few weeks, companies are confident that the demand for electric models will not be dampened and the adoption of electric vehicles (EVs) will continue to surge.

Ola Electric Scooter Fire

Despite several incidents of electric two-wheelers catching fire coming to light in the past few weeks, companies are confident that the demand for electric models will not be dampened and the adoption of electric vehicles (EVs) will continue to surge.

On April 9, as many as 20 electric two-wheelers manufactured by Jitendra New EV Tech caught fire while being transported from the company’s Nashik factory. While the cause of the incident is not known yet, the company is investigating the matter.

Four separate incidents of electric two-wheelers catching fire were reported in Pune, Vellore, Tiruchirappalli and Chennai, late last month. The models belonged to brands such as Ola Electric, Okinawa and Pure EV.

Amid high ownership costs for internal combustion engine models, owing to rising fuel prices and multiple price hikes announced by the original equipment manufacturers (OEMs), and enhanced government support, the electric two-wheeler penetration has been increasing rapidly in India. The electric two-wheeler retails jumped 463.61% to 231,338 units in FY22 from merely 41,046 units in FY21, as per the latest data from the Federation of Automobile Dealers Association (FADA).

Hero Electric, Okinawa, Ampere Vehicles, Ather Energy, Pure EV, Ola Electric, TVS Motor Company, Revolt Intellicorp, Benling India and Bajaj Auto were the 10 largest electric two-wheeler manufacturers in the country in FY22 in terms of retail sales.

“Any incident that puts consumers at risk is unfortunate and must be addressed at the earliest possible. However, we don’t feel that these incidents will derail the momentum the industry has gained over the past 12 months. Consumers are aware of the benefits associated with EVs and understand that there are brands in the market that offer well-engineered products,” a spokesperson from Ather Energy told FE.

“Despite these incidents, we have not seen any drop in consumer sentiments at any of our retail outlets across India. We do continue to see our booking numbers rising steadily. We feel that incidents of fire are isolated and hopefully will be resolved soon,” the spokesperson said. The company currently sells electric scooters like 450X and 450 Plus.

Bounce CEO and co-founder Vivekananda Hallekere observed that the customers will make the right choices with respect to parameters such as safety, durability, convenience and performance, among others.

Bounce will commence the deliveries of its E1 electric scooter across the country from April 18. The E1 is being produced at the company’s manufacturing facility in Bhiwadi, Rajasthan.

“With the right amount of awareness and transparency by manufacturers such as us, we see customers continuing to transition to EVs and eventually making EVs their primary modes of commute,” Hallekere said, adding that Bounce has been road-testing batteries for the last 3-4 years in real road conditions and our batteries have completed 4.5 crore kilometres on the road, even in 45 degree plus temperatures.

The high-speed electric two-wheelers are powered by lithium-ion batteries. A host of industry experts told FE that inferior cells, poor battery management system and inferior component materials could be among the reasons for lithium-ion batteries catching fire.

Benling India CEO Amit Kumar said that while there will be no material impact on the demand for electric two-wheelers due to fire incidents, some of the prospective buyers may overthink their decision but that will easily be outnumbered by the scores of other people who would be fresh converts.

“If incidents of electric vehicles catching fire continue to rise, insurance companies may resort to increasing premiums on such models,” Kumar noted.

Simple Energy founder Suhas Rajkumar said that a negative impact on the customer mindset is bound to be created with such EV fire incidents happening back to back. The company launched the One electric scooter in August 2021, priced at Rs 1.10 lakh (ex-showroom).

“While the EV industry is at a very nascent stage, a lot of R&D needs to be done before a customer puts in faith and belief in the vehicle. Such incidents will only hamper the buying behaviour of a customer,” Rajkumar noted.

With the cost parity and the government’s focus on electrification of vehicles, Crisil expects EV penetration to reach 15% in two-wheelers, 25-30% in three-wheelers, and 5% in passenger vehicles and buses in terms of volumes by FY26.

According to an analysis by Crisil, EVs present an opportunity of almost Rs 3 lakh crore for various stakeholders in India in the five years through FY26. It includes a potential revenue of nearly Rs 1.5 lakh crore across vehicle segments for OEMs and component manufacturers, and around Rs 90,000 crore in the form of disbursements for vehicle financiers, with shared mobility and insurance accounting for the balance.

When asked if the recent fire incidents will hamper the sales of electric two-wheelers, Crisil Director Hemal Thakkar said that while it may have a negative impact in the near term, in the long term, it is not going to be an impediment as this is a new age industry.

“But the government is playing its part very strongly where they have put up an independent probe committee to find out the reasons for the fire which is not being known at this point. From that perspective we need to wait to know the reasons for the fire as there could be several things which could have led to two-wheelers catching fire,” Thakkar said.

The Ministry of Road Transport and Highways (MoRTH) has already asked the Centre for Fire, Explosive and Environment Safety (CFEES), an arm of the Defence Research and Development Organisation (DRDO), to probe the fire incidents involving the electric two-wheelers and suggest remedial measures.

“In light of the fact that the EV industry is still in the nascent stages of development and holds immense potential, these fire incidents need to be taken seriously. Otherwise, the growing sector may be adversely affected,” said Vinkesh Gulati, president, FADA.

“As this is a new technology (EVs), all OEMs should road test the vehicle for at least 100,000 kilometres mandatorily on actual conditions,” Gulati added.

Lithium-ion battery manufacturer Lohum’s CEO and co-founder Rajat Verma said that there must not be a kneejerk reaction towards these incidents, with a need to look at the full context, while remaining focused on the larger goals of sustainability and safety.

“The sector is at a nascent stage, and the standards are being bettered continuously. Going forward, the responsibility of its development must be bestowed upon and shouldered by the industry and the government to set and implement stricter safety standards,” Verma said.

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First published on: 12-04-2022 at 19:34 IST