The 2W segment could be fully electrified in the coming years if we can overcome certain challenges.

The shift to electric mobility is driven by the need to switch to cleaner energy. The transport sector accounts for 18% of India’s total energy consumption, or annual emissions of 142 million tons of CO2 (of which road transport shares about 123 million tons). Ironically, India is still one of the countries with the lowest motorized traffic in the world, which is why it has one of the fastest growing transport sectors. Therefore, if no switch to electric mobility is made today, the dependence on fossil fuels will continue to increase, and so will CO2 emissions. The good news is that India has committed to reducing emissions intensity by 33-35% during COP21. This goal cannot be achieved without the participation of the transport sector. While the industry must reinvent and support government missions and policies with unilateral consensus to meet COP21 targets, it must also be practical and prudent in deciding what is feasible so that our energies are invested in results-oriented goals.

Electric mobility – especially electric two-wheelers (e2Ws) – addresses the challenge of the rising costs of purchase, maintenance, service and fuel for internal combustion engine (ICE) vehicles. Electric vehicles (EVs) are cheaper over their life cycle than ICE vehicles.

EVs and e2Ws do not have an engine, gears, or fuel tank. This allows car manufacturers to use the space these parts take up to come up with unique designs. EVs and e2Ws also offer better performance and superior driving experience compared to ICE vehicles, as they have fewer rotating parts and minimal vibration. These also offer stronger acceleration because an electric motor produces instant torque or pulling power, unlike an ICE which has to reach a certain RPM to reach maximum torque. EVs and e2Ws are considered safer because they are thermally cooler.

In the Indian road transport sector, a full shift from passenger and commercial vehicles to electric mobility does not seem realistic, supported by the reluctance to adopt EV. In the past five years, 97% of total sales have been conventional vehicles. However, the trend is changing as electric mobility jumped 160% in registration. Today, with a 17% share of electric vehicle adoption, the two-wheeler (2W) segment shows the greatest growth potential.

The 2W segment could be fully electrified in the coming years if we can overcome certain challenges. Two-wheelers are the largest mobility segment in India. According to Statista, in 2019 75% of the 296 million registered vehicles were two-wheelers. The e2W segment is growing rapidly, growing at a CAGR of 62% from FY16 to FY20. Despite the impact of the pandemic, it grew by 132% in 2021, with more than 233,000 lakh e2Ws sold in the year.

The e2W segment is new and faces challenges in the supply chain. It needs to build stronger relationships with local and global suppliers of auto parts and critical elements. In India, early movers are disproportionately disadvantaged as they struggle to establish and streamline the value chain. Future entrants to the e2W segment will be favored by an established supply chain and distribution network. With a continued government boost for domestic production and investment in building new critical sectors, our import dependency for EV parts will gradually decrease.

Demand creation is another challenge. While the government is encouraging the use of electric vehicles, public reluctance is due to a misunderstanding of cost, range, charging infrastructure and performance-related issues. EV battery and vehicle technologies are advancing rapidly. As supply increases with a streamlined value chain and better technologies, the cost of EVs and their batteries will drop. At the moment there are e2Ws that can deliver 200 km of range on a single charge. With advancing technology, range anxiety will be addressed.

A robust charging infrastructure is not a fundamental requirement for e2Ws. Most existing e2W owners charge at home and have a small radius in which they operate, so fear of range is usually not an issue for them.

As for larger bikes, such as off-road adventure motorcycles or long-haul cruisers, this segment is a niche in India, and by the time we electrify the commuter segment, there will likely be newer technologies to cater to larger bikes, including a much longer range than what is possible today. By then, even the charging network being developed primarily for four-wheelers would have been scaled up.

Regarding the B2B segment, the tricycle segment (3W) was the most electrified, accounting for 79% EV addition to date. So the segment will become saturated. A similar transition will be seen in the B2B e2W segment. The 2W fleet operating within a certain radius for last-mile deliveries can make the most of going electric.

In terms of body types, as scooters go electric, there is also a minuscule penetration of entry-level electric motorcycles. Being an industry that is still in its infancy, most manufacturers started with the relatively easier to develop and implement option of electric scooters. With the advancement in R&D, the challenges in electric motorcycle design will be addressed through knowledge and learning transfer.

Despite all these challenges, 2W has a real chance of achieving 100% electrification in a short time. The e2W segment will undergo transformation and consolidation over the next five years, and it’s the same time it can go all-electric.

The author is founder and CEO, Simple Energy (which has developed an electric scooter to be launched in June).

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