The Top 5: Reasons Indians are Hesitant to go with E2W

India is the largest two-wheeler mobility market in the world, with sales peaking at 21 million units in 2019. With the growing concerns over pollution-induced climate change, electric mobility is seen as a substitute for fossil-fuel-dependent conventional vehicles. Two wheelers is also where adoption is expected to be earlier and faster due to lower costs vis a four wheeler EV’s. Yet, there are reasons Indians are Hesitant to go with E2W.

The two-wheeler EV market has almost all the ingredients in place – products, technology, manufacturing capacity, supply-chain, hype – except the most important one, demand. Year 2021 saw EV 2-wheeler sales pegging above 135,000. That is a paltry 1.1% of the two-wheeler market, despite the sales of conventional vehicles plunging to the lowest since 2012.

While convenience, freedom from fuel price hikes, government support, and new product solutions are driving the transition, there is considerable ambiguity around product stability, real-world user experience, and costs that are restricting this transition.

Here’s a list of the top reasons Indians are hesitant to go with E2W.

#1 Higher Cost

Indian market is sensitive to price, and cost is always the first-factor that determines popularity amongst the masses. Indian consumers are reluctant to buy an expensive E2W, especially in face of cheaper conventional ICE alternatives. The price difference between EVs and ICE 2-wheeler options stands between 35-60%. Unless EVs show significant benefits in terms of fuel savings and tax subsidies Indian auto buyers will be reluctant to spend money on EVs.

For instance, the on road cost of Ather’s e-scooter 450X is about Rs 1,47,000. which is quite high when a customer considers conventional option. The average on-road cost of a 125cc petrol scooter is just around Rs 1,07,500.

The recent move to a battery swapping policy has the potential to drive down upfront cost significantly, if executed right, so that’s a big positive that could play out by this year end.

#2 Range Anxiety and Inadequate Charging Infrastructure

This is not just limited to 2-wheeler segment, but is a question on everyone’s mind before purchasing any EV. So far, EVs can only cover a limited shorter distance on a single charge, against what a petrol/diesel vehicle covers with a single filling. This worries the customers about the vehicle’s capability to reach the destination before the battery dies out. Today, two wheeler EV’s in the market typically have a range between 60 kms to as high as 200 kms.

Currently, India has a total of 1,640 operational public EV chargers. Out of which, nine cities – Surat, Pune, Ahmedabad, Bengaluru, Hyderabad, Delhi, Kolkata, Mumbai, and Chennai – account for approximately 940 stations.

Insufficiency of charging infrastructure further exacerbates range anxiety. It can be challenging to take the scooter for a long ride. Further, the charging infrastructure is considerably weak in rural or sparsely-populated areas. 24 hour charging points, faster charging and more will help. India has  target of setting up charging stations in 22,000 of the total 70,000 petrol pumps across the country by December 2022.

#3 Repair and Maintenance

The technology is still relatively new. Thus, unlike for legacy two wheelers, there is no or very small skilled workforce providing repair and maintenance services, especially on highways. Thus, if the 2-wheeler breaks down in some remote location, it could become a dreadful situation. Moreover, with many of the current firms very small, there aren’t enough repair centers and spare parts dealers for EVs countrywide. One reason why firms have started off with regional, or local markets, one at a time before expanding.

#4 Inefficient Battery Technology

There are various issues associated with EV batteries. A Li-ion battery generally powers an EV. A typical Li-ion battery will be able to handle 300 to 500 charge/discharge cycles before diminishing in capacity. For an average electric scooter, this is just 3000 to 10,000 miles!

For example, Ather Energy stated its E2W battery diminishes in capacity to 30 percent degradation in five to six years. It may need customers to change the pack when it hits 70 percent capacity. Though it’s worth nothing that the time and distance a manufacturer is willing to warrant their battery doesn’t really have a direct connection to battery life. This is just like how a 2-wheeler won’t simply drop dead the day its warranty period comes to an end. Notably, TVS offers a 3 year/50,000km warranty on the iQube, whereas Ather provides a 3 year/unlimited km warranty.

Further, EV batteries take much more time to charge, compared to the shorter refueling times of ICE vehicles. Furthermore, electric batteries must be replaced once they are damaged. And this replacement cost is huge. Both these issues are changing thankfully, with both better battery quality (capable of 2000+ charging cycles) and battery swapping possibilities in the pipeline.

#5 Speed and resale value

Like any new product, resale value for these new EVs is yet to be established, especially with batteries forming such a large share of the cost (25-35%). In India, that matters. Finally, you have the speed factor of course. Most EV’s for the mass market offer very low top speeds as compared to their ICE cousins, and that is a psychological issue for many buyers, who may not even be speed maniacs.

With the advent of high-speed electric 2-wheeler, the sector may now lure speed-maniacs. The high-speed E2W saw over one lakh units sales in 2021. Just what they were waiting for!