Why the Future of Electric Vehicles May Depend On Scooters

Covid-19 has caused incomes to shrink and car sales to fall. With more city dwellers noting the decline in air pollution from less traffic, the combined financial and environmental benefits may spur sales of electric scooters.

And those owners may eventually turn to electric cars when their incomes permit. JL


Eric Bellman reports in the Wall Street Journal:

Inexpensive motorcycles and scooters will make up the largest group of new vehicles hitting the world’s roads in the next decade—and a rapidly growing share of those bikes will be electric.With auto sales slowing, hundreds of millions of them will be sold in India, China and other emerging markets. Electric two- and three-wheelers on the roads avoided more pollutants than all electric cars combined in 2018. An electric-motorcycle boom could launch a new generation of drivers who prefer electric vehicles, and may be more likely to choose electric cars once they can afford them.

Inexpensive motorcycles and scooters will make up the largest group of new vehicles hitting the world’s roads in the next decade—and a rapidly growing share of those bikes will be electric, say manufacturers and analysts.

With auto sales slowing in the biggest developed markets, electric two-wheelers may soon have their moment. Hundreds of millions of them will likely be sold in places like India, China and other emerging markets, according to projections from the Energy and Resources Institute, a New Delhi think tank.

Gasoline-powered bikes still make up the bulk of two-wheeler sales, but companies like China’s Nasdaq-listed NIU Technologies and India’s Hero Electric Vehicles Pvt. Ltd. have begun offering reliable electric motorcycles and scooters at more affordable price points. Startups aiming to become the Tesla of two-wheelers are touting high-tech, sleekly designed models for less than $2,000.

An electric-motorcycle boom could launch a new generation of drivers who prefer electric vehicles, and may be more likely to choose electric cars once they can afford them, say analysts and executives.

Electric two-wheelers are already having an environmental impact, according to the International Energy Agency, a Paris-based energy watchdog. Electric two- and three-wheelers on the roads avoided more pollutants than all electric cars combined in 2018, the most recent year for which data is available, according to the IEA.

“Electric mobility is not only about cars,” said Marine Gorner, an analyst at the IEA. “Two- and three-wheelers electrify the fastest so, they have a significant role to play.”

Electric options attracted Raghav Srinivasan, a Bangalore, India-based programmer who said he switched to an electric scooter from a gasoline-powered one last year. With the styling and performance, the e-scooter is a better value than a similar gas-powered vehicle, he said.

“I didn’t pick it for the environmental aspect,” he said of his scooter made by Ather Energy, an Indian startup.

The coronavirus crisis has upended the transportation and energy industries, and a global recession could suppress demand as consumers put off purchases. The shift toward electric vehicles will continue nevertheless, industry executives predict. Some speculate that demand could rise post-pandemic if people seek alternatives to crowded public transportation.

China has offered perks for electric two-wheeler manufacturers and imposed restrictions on sales of those that run on gasoline. More than 1.5 million electric two-wheelers were sold there last year, said Paul Blokland, director of Segment Y Automotive Intelligence, an automotive consulting company. Electric cars make up less than 5% of the car market in China today; electric two-wheelers comprise around 10%, of the motorcycle and scooter market, Segment Y estimates.

Pipe Dreams

Electric two- and three-wheelers have displaced more emissions than electric cars globally.

Millions of tons of CO2 avoided by different types of vehicles in 2018

China

Europe

North

America

Other

Electric two- and three-wheelers

Total: 23.29

Electric cars/tight commercial vehicles

10.88

Source: IEA

India, the world’s largest two-wheeler market by annual unit sales, appears set to plug in next. Startups like Ather, established Indian brands like Bajaj Auto Ltd. and global brands like Honda Motor Co. are helping electrify the nation’s two-wheeler fleet and the government is pushing manufacturers to make more through regulations and tax breaks.

Falling battery prices have helped put electric two- and three-wheelers within 20% of the cost of their nearest gas-powered competition. Going electric is often cheaper, said Naveen Munjal, managing director of Hero Electric Vehicles, India’s largest electric two-wheeler brand. Mr. Munjal said Hero’s midrange scooters, which have a higher sticker price than comparable gasoline-powered bikes, cost users 19% less over a three-year period when fueling costs are factored in.

Reducing the number of gas-powered vehicles is a public-health priority in India, which suffers the worst air quality in the world, shortening the lives of millions of its citizens, according to studies by the University of British Columbia and others.

More than 150 million two- and three-wheelers use the nation’s streets, a figure expected to double in the next decade, estimates the Energy and Resources Institute.

India’s government has said it wants 30% of new vehicles to be electric in the next decade, and it has even higher goals for two-wheelers. In China, the IEA estimates 90% of two-wheelers will be electric by 2030.

Hampering growth are higher sticker prices and the need to charge electric bikes. Of the 20 million two-wheelers sold annually in India, less than 2% are electric, estimates Segment Y Automotive.

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India’s emerging batch of electric vehicles could fill a need for affordable, sturdy and environmentally friendly bikes in South Asia, Africa and elsewhere, said Deepesh Rathore, an automotive consultant who specializes in electric vehicles. Indian makers of electric two-wheelers say they expect demand will take off in the coming year and the vehicles will get cheaper as demand goes up, allowing them to start making the most components locally.

Scooters made by Ather Energy are designed to withstand Indian driving conditions, with aluminum frames for stability and grouped wiring that won’t rattle out of place as drivers zip around traffic jams and clatter over potholes and rutted roads. The company has set up charging stations in key markets and installs charging outlets in customers’ homes and offices.

It has also tried to upgrade the scooter experience with keyless ignition and flat-panel displays, all for about $1,600.

“The idea is to build something that is as good or better” than gas-powered scooters, said Ather’s co-founder and chief executive, Tarun Mehta.

Hero Electric puts most of the wiring and electrical components high in its vehicles so they can cut through monsoon-flooded streets without shorting. The bikes’ removable batteries can withstand 110-degree heat, and Hero has trained thousands of garage mechanics to change the tires on their vehicles. It also gives customers a way to stand out in a traffic jam, said Mr. Munjal.

“We give them green helmets to say ’I am the one making the change, I am a green warrior,’” he said.