First & Last Mile Mobility Conclave: Government should consider increasing cap on subsidies to drive e-motorcycle sales

Lalbhai was speaking at The First & Last Mile Mobility Conclave 2022 organised by The Financial Express.

The government of India through the FAME II scheme (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India) is looking to drive the adoption of electric vehicles in the country. In addition, various State governments in the country have also rolled out policies to support drive electric vehicle sales. 

“India has set itself an ambitious target of reducing CO2 emissions by 1 billion tons by the year 2030 and reaching net zero by the year 2027. The country is the largest two-wheeler manufacturer and 62 per cent of the fuel consumption in India comes from the two-wheeler space. Around 65 per cent of the two-wheelers sold in India are motorcycles and the country essentially runs on motorcycles,” said Mohal Lalbhai, Founder & CEO, Matter.

Lalbhai was speaking at The First & Last Mile Mobility Conclave 2022 organised by The Financial Express.

He said that there is a very favourable ecosystem in India for electric vehicles in the country, with both demand and supply side incentives coming in from the centre and the States. “We have seen that especially consumer education and awareness has gone up significantly over the last two years. We have seen rise in sales of EVs YoY. In the January to May period, close to 2 lakh electric vehicles were sold this year alone. However, this amounts to just 2 per cent penetration as compared to the target of 80 per cent penetration by the year 2030.” 

He further mentioned that while most products today cater to the non-motorcycle category in the two-wheeler space, addressing the motorcycle market will significantly increase penetration. 

“The government through incentives has kept a cap on subsidies for vehicles at Rs 1.5 lakh but considering the inflation over the last few years and the fact that motorcycles are generally higher in performance than other two-wheelers, it would be great if the government can consider moving the cap on the subsidy. It (subsidy) should also continue in the future to enable the two-wheeler market to reach its target of 80 per cent penetration by the year 2030,” shared Lalbhai. 

The CEO said he sees subsidy to continue to play a pivotal factor in enabling double digit year-on-year growth. “We definitely believe that motorcycles are going to be the majority of the two-wheeler market in the electric space going forward and the fundamental difference comes down to what a motorcycle offers as compared to other two-wheelers. The difference comes down to the powertrain and riding experience. Consumer today looks at an electric vehicle as a tech product. This comes down to features, performance, and overall experience.”

He believes that for a country as diverse as India there is “not going to be a one product fits all approach, there will have to be multiple products catering to different segments and requirements across the country.” 

From use cases to environmental factors to altitude, there’s a lot of things that goes into designing a product and to address the expectations of the Indian consumers and Indian needs especially from the aspects of safety, security, reliability and performance. We are continuously innovating on key topics that matter. 

Lalbhai highlighted a few “System architecture and powertrain sizing is one of the most critical ones, it is imperative that we avoid overpowering or underpowering vehicles. Secondly, power to weight ratio has a significant impact on efficiency which in turn leads to impact on range. The use of advanced materials here is going to go a long way and material science is what we believe is going to be the true differentiator in terms of product performance in the years going ahead.”

Giving an example of Matter, he said that the start-up looked at another topic, which is the connected features and edge computing. Lalbhai is of the opinion that this really drives the “wow experiences” for the riders and it encapsulates the idea of a tech product as compared to conventional automotive and talking about environmental benefits.

“Thermal management for India needs is something that is definitely looked into and very closely coupled with our announcement of liquid cool battery –

Matter Energy 1.0 – and liquid cool powertrain which is Matter Drive 1.0. These aspects together for us are the core philosophy and building blocks to give consumers the performance, the features and the experience that they need and this in turn is going to drive significant penetration of electric motorcycles and drive the overall market toward complete electrification in the next decade. We strongly believe that there are exciting times ahead especially with the EV transition that’s picking up momentum, we at matter are looking to drive this transition forward in the motorcycle space with our first motorcycles slated to launch in 2022,” concluded an optimistic Lalbhai.  

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